The Ministry of Finance is preparing changes that will hit IT professionals providing services to their own limited liability companies (sp. z o.o.) particularly hard. Until now, many of them have benefited from a low flat-rate tax (ryczałt) of 5% on settlements with related entities. The new draft proposes raising this rate to at least 12% for such services.
What is changing?
- If you provide IT services to a company in which you are a shareholder or with which you are related, the draft provides that these contracts will be subject to the higher 12% flat rate.
- The change is expected to affect several tens of thousands of people in the IT sector who have until now benefited from preferential rates.
- The Minister's aim is to "tighten up" the tax system and close the loopholes that allow reduced rates to be used in related-party relationships.
Who will be affected most?
- IT professionals running a B2B business who work with companies in which they hold shares.
- Those who have so far used the model of a sole proprietorship (JDG) plus their own sp. z o.o. as the recipient of services.
- Freelancers, contractors and programmers working directly for companies that are related economically or through capital.
How can you protect yourself?
- Review your contracts and related-party relationships - assess which relationships may be subject to the higher rate.
- Change the structure of your settlements - move part of your services to an independent (unrelated) business, where a lower flat rate or another tax may be applied.
- Document your work and costs - especially in the case of the IP Box and innovative projects - to show which services genuinely qualify for preferential treatment.
- Consider alternative structures - foreign companies, holdings, other jurisdictions - where the regulations allow and where the optimisation will not be risky.
- Seek advice and prepare in advance - before the rules come into force, plan the restructuring of your arrangements and the minimisation of tax risks.
Our comment
This is another example of a change made "to fit the rule", aimed at a sector that has until now benefited from reliefs and preferences. IT professionals - often innovators and a driving force of the economy - may be penalised for using legitimate settlement models. But the change does not mean doom - it means you need to rethink the structure of your business.
At Global Tax Partners, we analyse how the new rules will affect your income and help you implement solutions to avoid drastic tax losses.
👉 If you work in the IT sector - contact us. We will prepare an analysis and a strategy to protect your income from the approaching wave of changes.
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