What form of company taxation?


There are situations where performing certain activities for an employer may turn out to be less profitable than in the case of self-employment. When resigning from a full-time job for your own business, it is worth knowing that not every form of company taxation is always equally available. Find out more by reading our article!

Taxation at a flat rate

When starting your own business, one option is to choose to tax your operating income with a flat rate of 19%. For this purpose, a relevant written declaration must be submitted by January 20 of the tax year to the competent head of the tax office. When setting up business during the year - you must submit the application using the CEIDG-1 form, and if the taxpayer does not use this solution, he will also have to submit a written declaration to the tax office, no later than on the day of obtaining the first income. A delay or change during the year is not allowed.

An exception where the exclusion from flat taxation has been applied exists in the case of taxpayers and partners of partnerships who obtain income from business activity for the provision of services to the current or former employer and these services are identical to the activities they performed or performed in the tax year as part of an employment relationship or a cooperative employment relationship. However, the regulations do not prohibit in this situation the use of the straight-line method from the next tax year, even if the scope of the business activity coincides with the scope of the former full-time job.

In the event of non-compliance with the above regulations, the taxpayer may lose the right to settle the flat tax.

Lump sum on recorded revenues

Pursuant to Art. 8 sec. 1 point 6 of the Lump-sum Income Tax Act, if the taxpayer performed in a given tax year or in the year preceding the tax year activities falling within the scope of their own economic activity, on the basis of an employment relationship or a cooperative employment relationship, he cannot exercise the right to taxation lump sum. Therefore, if the entrepreneur intends to provide services to the former employer that correspond to the scope of employee duties, he must wait a full tax year.

Failure to submit the declaration proves the general rules

The available forms of company taxation are provided for in the PIT Act and the Lump-sum Tax Act. The first includes: general rules (tax scale), a flat tax at the rate of 19%, while the second includes a registered lump sum and a tax card.

When submitting the CEIDG-1 form, you must also submit a declaration on the choice of the form of taxation, which is its integral part. If the taxpayer does not declare the form in which he will make settlements with the tax office, then he will have to apply the tax scale.