Small businesses face a number of taxes that they – and their directors – must pay. Here’s our guide to the small business taxes you should understand.
Type of taxes
As a consequence of registering your own company in Poland you will get your brand new NIP number. From now on this number will be used for your tax identification. But before that happens you need to decide which tax suits you the best. Once you choose one form of taxing it is quite tricky to change it and as well it may influence your profits in a big way.
In this case, there are two main tax scales and you automatically get classified under one when you set-up a company. The classification depends on the annual income of your business. If you get less than 85 528 PLN you will have to pay 18% tax, and when you exceed this amount you have to pay 32%. If your business is not getting on well and you just earned not more than 3091 PLN you don’t have to pay tax but you still have to fill out and deliver your tax declaration to the tax office. The big advantage of the general tax is that you can use tax benefits and pay less.
This type of tax means you always pay 19% no matter what the level of your annual income is. In other words no matter how much you get the tax stays the same. In this case, you are not allowed to use the tax benefits
Flat rate means that you pay for the income no matter how high the costs of it were. What is more, it is available only for a specified range of business activities. The good thing is that you don’t have to bother yourself with all the accounting stuff as you only have to run the magic book of income which is much easier to do and much cheaper if you hire an accountant to take care of your tax. The bad thing is that even if the costs of income surpass the income itself – you still have to pay the flat rate.
Here are the exemplary flat rates and the types of business activities that are allowed to choose this form of tax.
20% – income from the provision of free or specialized professions like doctors, legal translators, dentists
17,5% – income from the provision of specified immaterial services like car renting, parking service
8,5% – income from the provision of specified services like running a kindergarten (we know you want to do it!)
5,5% – manufacturing and construction activities
For the full list of flat rates and the types of business entitled to this form of tax, you should contact your local Revenue Office.
Ability to account on the basis of the tax card is designed for taxpayers engaged in very specific types of business. To qualify for this group have yet to meet certain conditions:
1. You can not use third-party services (with the exception of professional services such as an accounting office)
2. You can not employ people on casual work contracts (umowa zlecenie) or a contract (umowa o dzieło) for work activities that are work-related to the activities conducted by you (you can hire people on a contract of employment but to the limits attributable for your activity)
3. Your spouse can not run a business in the same range as you (you can hire them though if they’re still within the employment limit for your activity)
The rate of the flat tax rate depends on:
1. The nature and scope of the operation
2. Number of employees
3. The number of inhabitants of the place, in which you decide to open the business
Choosing the tax form is not the last thing to do. While running a business, even when you’re self-employed, you need to pay the regular contributions to the tax office. Don’t forget about that as the revenue office won’t do it for you and they won’t set the amount of such contributions. You need to do it all by yourself! You have to options to choose from right now:
1. Calculate the amount of the contribution by yourself by summing the level of income and costs and then calculating the profit which is the base of the amount of this contribution.
2. Leave it to the well-trained and professional accountant who will do all the job for you leaving your mind free of all the tax problems…