Compulsory change of the form of taxation from the tax card

Service-Tax

Taxpayers who want to change the form of taxation in 2021 and have such an option, in conjunction with the fulfillment of the conditions for its application, by the 20th day of the month following the month in which they obtained their first income in a given year, i.e. by February 20, if they obtained income in a given year. January. However, it should be noted that there are also situations in which taxpayers may be forced to change the form of taxation during the year!

When will the taxpayer of the tax card lose the right to use it within one year?

The Lump-sum Income Tax Act indicates that in some circumstances a taxpayer who uses a tax card may lose the right to its further application within a year, i.e. until the end of a given calendar year. A taxpayer will lose the right to a tax card within a year if:

  1. will initiate business activity abroad,

  2. will start the production of goods subject to excise duty,

  3. will use the services of subcontractors,

  4. will sign at least one civil law contract with the contractor,

  5. exceeds the permitted number of people employed under an employment contract,

  6. the taxpayer's spouse opens the same business,

  7. opens another activity - under the tax card, the taxpayer has the option to conduct one activity.

Prohibition of using the tax card by the taxpayer based on the decision of the tax office

A taxpayer may lose the right to use a tax card, not only by violating one of the above-mentioned conditions. The tax office may issue a decision unfavorable for the taxpayer on the termination of the right to continue using the tax card for a given activity. This decision will then be effective until the end of the calendar year. Then, a change in the form of taxation may take place in the case of:

  1. providing by the taxpayer in the application for the choice of the form of taxation with a tax card, data that do not correspond to reality,

  2. the taxpayer's placing false or inconsistent with reality data on the issued bills or invoices documenting the transaction of sale of goods or services,

  3. failure to send a notification about the occurrence of events resulting in the loss of the right to the tax card within 7 days to the competent head of the tax office.

If the tax office issues a decision to lose the right to use a tax card by the end of a given calendar year, the taxpayer will be obliged to determine and pay advances for income tax according to the tax scale for the entire calendar year. Compulsory change in the form of taxation from tax staff to general rules during the year causes a situation in which the amounts of tax paid so far (when applying the tax card) until the loss of the right to tax with the tax card will be credited towards income tax advances in the form of general rules . Unfortunately, taxpayers who receive the above decision from the tax office do not have any possibility, both at the time of losing the right to a tax card, and by the end of a given calendar year, to switch to a lump sum or flat tax. The change in the form of taxation will result in the necessity to establish a tax book of revenues and expenses from the first day of the month following the month in which the taxpayer received the decision on the expiry of the right to tax activities with a tax card.

A taxpayer who lost the right to a tax card during the year due to the occurrence of at least one of the above-mentioned prerequisites (does not apply to the decision issued by the tax office on the loss of the right to a tax card), is required to report this event in the form of a notification submitted to the tax office competent for the address of residence within 7 days from the date of the occurrence of these circumstances. The above declaration is submitted by the taxpayer on the PIT-16Z form.

Voluntary change of the form of taxation from the tax card - is it possible?

The day of losing the right to a tax card is the first day to be taxed with another form of taxation, which in this case are general rules. On the other hand, in the year of losing the right to a tax card, the taxpayer is not entitled to benefit from flat taxation.

Such a position was confirmed by the Director of the Tax Chamber in Łódź in the individual ruling of March 9, 2012, IPTPB1 / 415-342 / 11-5 / MD, in which we can read:

"(...) the loss of the conditions for lump-sum taxation on revenues recorded in the form of a tax card during the tax year does not allow the Applicant to pay in that year income tax on income obtained from non-agricultural business activities at the rate of 19%, the so-called "flat tax". However, it obliges, starting from the date on which the conditions were lost, to keep a book of revenues and expenses and to pay income tax on general terms, i.e. using the tax scale, pursuant to Art. 27 sec. 1 above the Personal Income Tax Act (...) ”.

A taxpayer who has lost the right to the flat-rate form of taxation with a tax card during the year will be obliged to start keeping a tax book of revenues and expenses by the end of the calendar year if the tax scale is selected as a form of taxation valid until the end of the calendar year.

In connection with the loss of the right to the tax card and the change in the form of taxation, the taxpayer will receive new obligations (starting from the date of losing the right to the tax card) in the form of taxation in accordance with the general rules for the remainder of the period of a given calendar year.

Finally, it should be mentioned that a taxpayer who has lost the right to tax his business by the end of a given calendar year with a tax card is obliged to prepare a physical inventory on the date of losing this right.