Tax department

Fixed amount tax

A fixed amount tax (karta podatkowa) is the most simplified form of taxation in Polish tax law. There are however certain limitations. Only individuals conducting their business activities as sole traders or in the form of civil law partnerships can use this tax solution. Another significant limitation is that this form of taxation is not available to everyone.  

This simplified method is applicable to six categories of business activity. Among them are:

  • retail sale of food, drink, flowers and tobacco products – except for drinks with alcohol content of over 1,5%;
  • retail sale of non-food products except for e.g. motor fuel;
  • catering services;
  • transportation services (with the use of one vehicle);
  • entertainment;
  • sole traders operating in to health or veterinary businesses.

Details of the above matters are within the Lump-sum Income Tax Act.

Benefits and procedure

Entrepreneurs using the fixed amount tax method can count on a numerous accounting simplifications. They are not obliged to bookkeeping, filing tax returns or making advance payments on personal income tax. They can also deduct the health insurance contributions. However, they have to issue bills or invoices, pay the tax in fixed deadline and keep individual payroll sheets of their employees.

The choice of the fixed amount tax should be made before starting the business activity. If the business activity is already operating, entrepreneur has time 20th of January of the given year to make this decision. This will be in the effect for the following years.

CGO Legal law firm supports entrepreneurs in choosing the fixed amount tax as their taxation method. We determine the factual circumstances, the legal status and assist with completing the necessary documentation as well as with reporting the fact to the competent authorities.

If you want to learn more about fixed amount tax, please do not hesitate to contact us.