The Ministry of Finance plans to raise the flat-rate tax - what will change?
The Ministry of Finance has published a draft legislative amendment that could fundamentally change the tax position of hundreds of thousands of Polish business owners who pay flat-rate tax on recorded revenue (ryczałt). Under the draft, people using the preferential 8.5% flat rate whose annual revenue exceeds PLN 100,000 will have to pay a higher 15% rate on the amount above that threshold.
The ministry justifies the proposed changes by the need to close loopholes in the tax system and curb so-called tax optimisation. In the ministry's view, some business owners deliberately choose the flat-rate form of taxation to avoid the higher burden that would arise under the general rules or the flat-rate 19% business tax (podatek liniowy). The new rules are meant to restore balance in the system and ensure greater tax fairness.
The planned date for the new rules to enter into force is 1 January 2027. This means business owners still have time to prepare, but it is already worth analysing the potential impact on your business and considering whether to adjust your form of taxation.
Who will be affected by the changes - a list of at-risk sectors
Despite the Ministry of Finance's claims that the rules target people using aggressive tax optimisation, experts stress that the new rules will hit honest business owners above all. As Dr Piotr Sekulski, a tax adviser, points out, the increase will cover a broad group of people working in popular service professions who are by no means "schemers".
The sectors and professions particularly exposed to the new rules include:
- Trainers and personal trainers - running one-person businesses, often with no need to employ staff
- Sales representatives - working independently in the field on their own account
- Beauticians and beauty industry specialists - running one-person studios
- Some IT specialists - taxed at 8.5% for advisory and consulting services
- Freelancers and independent professionals - translators, copywriters, graphic designers and other service providers
- Small service providers - mechanics, electricians and plumbers running one-person businesses
As Arkadiusz Lament of GlobalTax Partners stresses, a great many popular service professions are taxed at the 8.5% flat rate. For these people, the PLN 100,000 annual revenue threshold does not mean high earnings at all - after deducting the costs of running the business, actual income is often much lower.
The requirement to employ a member of staff - a loophole or a barrier?
The draft provides a way to avoid the higher tax rate, but on one key condition - the business owner must employ at least one full-time employee throughout the entire calendar year. At first glance this seems a reasonable solution, but in practice it is a barrier that many small business owners can hardly overcome.
The problem is that one-person businesses by their nature often do not need to employ anyone else. A trainer running workshops, a personal trainer or a beautician works alone, and hiring an employee would make no economic sense for them. The cost of employing a full-time employee in 2025 is at least several tens of thousands of zlotys a year, taking into account gross salary, employer contributions to the Social Insurance Institution (ZUS) and administrative costs.
For a business owner earning revenue of PLN 150,000-200,000 a year, the difference between the 8.5% and 15% rates on the amount above PLN 100,000 may be lower than the annual cost of keeping an employee. As a result, many business owners will face a paradoxical choice: pay a higher tax or incur even higher costs of artificial employment. Neither option is good for the growth of a small business.
Potential economic consequences for business owners
Consider a specific example. A business owner with annual revenue of PLN 200,000, previously taxed solely at 8.5%, would pay PLN 17,000 in flat-rate tax. After the changes, they will pay PLN 8,500 on the first PLN 100,000 (at 8.5%) and PLN 15,000 on the excess (at 15%), giving a total of PLN 23,500. That is an increase in the tax burden of PLN 6,500 a year - an amount that can matter a great deal to a small business.
How to prepare for the changes - practical tips
Although the new rules are due to take effect only from 1 January 2027, it is worth starting to prepare now. A proactive approach to tax planning will help you minimise the negative effects of the changes and choose the best way to be taxed.
First of all, every business owner using the flat-rate tax should carry out a comprehensive tax review of their business. You should analyse carefully whether the flat rate will still be the most advantageous form of taxation, or whether it is worth considering a switch to the general rules (tax scale of 12% and 32%) or the flat-rate business tax (19%). The best choice depends on many factors, including the level of revenue, the level of deductible costs and the taxpayer's individual circumstances.
It is also worth following the progress of the draft legislation. During public consultation and parliamentary work, the rules may change significantly - the revenue threshold may be raised, the rate modified or the conditions relaxed. It also cannot be ruled out that, under pressure from experts' criticism and business organisations, the draft will be withdrawn or substantially reworked.
When is it worth consulting a lawyer?
The situation calls for individual analysis, especially for business owners whose annual revenue is around or above the PLN 100,000 threshold. Professional legal and tax advice will help you not only choose the most advantageous form of taxation, but also plan the structure of your revenue and expenses in a way that is lawful and, at the same time, tax-efficient.
Need support? Contact our firm
The planned changes to flat-rate taxation are a serious challenge for thousands of Polish business owners. Whether you run a one-person service business or a company employing several people, the new rules may significantly affect your tax burden from 2027.
Don't wait until the last minute. A professional legal analysis of your tax position today will allow you to make informed decisions and avoid unnecessary costs in future. Our tax law specialists will help you assess whether your current form of taxation is still optimal for you, and will propose solutions tailored to the specifics of your business.
Contact our firm to arrange a consultation. We will help you get safely through the coming tax changes and look after your company's finances.
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