Criteria for granting middle class relief - who will benefit from the preferences?


The tax relief for the middle class, which was originally not supposed to cover entrepreneurs, will be a new preference for taxpayers who settle accounts on general terms by the government's decision. As it turns out, the questionable criteria for granting the middle class relief may mean that a significant part of entrepreneurs will not be able to take advantage of it. Therefore, we checked what criteria are meant!

Relief for the middle class also for entrepreneurs - are you sure?

In the act on the reform of the Polish Order adopted by the Sejm, changes were introduced in the scope of the middle class relief, which, according to the draft, will also be available to entrepreneurs who settle accounts on general terms. The relief is to apply to taxpayers who earn revenues ranging from PLN 68,412 to PLN 133,692. Its purpose is to compensate for the negative effects related to the change in the amount of the health insurance contribution and the inability to deduct it from the tax advance.

Doubtful criteria for granting middle class relief in the bill

The criteria for granting middle class relief are defined in Art. 25 sec. 4a of the draft act on the Polish Deal, which indicates that the amount of the allowance for persons running non-agricultural economic activity is determined on the basis of the revenues obtained from this activity minus the costs of running a business - excluding the costs of social security contributions. Doubtful criteria for granting a middle class relief are therefore the entry "costs of running a business", because in the case of business activities, pursuant to Art. 22 of the Personal Income Tax Act deals with tax deductible costs. The definition of operating costs differs significantly from the tax deductible costs referred to in Art. 22 u.p.d.o.f, because the operating costs are all expenses incurred by the entrepreneur in connection with the conducted activity.

Therefore, if this provision is not specified at the stage of the bill, it may turn out that the middle class relief addressed to entrepreneurs is a fiction and in fact will not apply.