Lump sum for non-public kindergarten - is it possible?

Service-Tax

In recent years, numerous kindergartens have been established in most urban centers. It is a response to the increasing demand for them. Typically, kindergartens are run by business entities. They want to choose the most favorable form of taxation of the kindergarten they run. Is a lump sum for a private kindergarten possible? We will answer this question in the article.

Lump sum on recorded revenues

One of the forms of business taxation is the so-called checked lump sum. The rules of taxation with flat-rate income tax on recorded revenues are regulated in the provisions of the Act of November 20, 1998 on flat-rate income tax on certain revenues earned by natural persons. In the lump sum on recorded income, the tax base is the income earned after taking into account any applicable deductions.

Thus, in the case of a lump sum, we do not deduct tax deductible costs from the income. Therefore, it pays off for entrepreneurs who do not incur significant costs related to running a business.

Example 1.

The taxpayer plans to start a construction business. It can be taxed both on general principles and with a registered lump sum. The taxpayer does not plan to make any purchases related to the conducted activity. What is the most favorable taxation method in such a case?

In our case, the best option is to choose a flat rate. Its rate in this case is 5.5% of the amount of income.

When choosing a registered lump sum, the taxpayer must remember that he will not be able to:

  • settle accounts jointly with the spouse;

  • will not benefit from the preferential settlement for single parents;

  • he will not incur a tax loss, which he will be able to settle in the following years.

Who can benefit from the lump sum?

Taxation in the form of a lump sum on recorded revenues may be used by:

  • natural persons generating income from business activity;

  • inherited enterprise;

  • civil partnerships, the only partners of which are natural persons;

  • civil partnerships of natural persons and inherited enterprises;

  • general partnerships, the only partners of which are natural persons.

In the case of the above-mentioned taxpayers, in order to be able to benefit from lump-sum taxation, their income in the previous tax year may not exceed the limit of EUR 2 million, calculated according to the average EUR exchange rate announced by the National Bank of Poland on the first business day of October of the previous year. Of course, not every business activity can benefit from flat-rate taxation. One of the cases when we cannot use it is a situation when we start our business on our own and as part of this activity we obtain income from the sale of goods, products or from the provision of services to the former or current employer with whom we cooperated on the basis of an employment contract in the year tax or previous tax year.

Donation as income

In the case of kindergartens, most often, apart from payments made by parents, the persons running them receive a subsidy from the commune office. In this case, it is income.

Income from business activity also includes subsidies, subsidies, subsidies and other free benefits received to cover costs or as reimbursement of expenses, except when these revenues are related to the receipt, purchase or own production of fixed assets or intangible assets, from which in accordance with Art. 22a-22o, depreciation write-offs are made (see Article 14 (2) (2) of the PIT Act).

However, the above means that in the case of a kindergarten, income is not only obtained from payments from parents, but also as a subsidy from the commune. Thus, taxpayers wonder whether, by obtaining revenues from two sources, they can tax all revenues at a lump sum.

Lump sum for a private kindergarten

At the outset, let us remind you that in Annex 2 to the Act on flat-rate income tax on certain revenues earned by natural persons, there is a list of services, the provision of which excludes the taxpayer from taxation with a flat rate on recorded revenues marked according to the Polish Classification of Products and Services. Under item 48 there is a symbol PKWiU ex department 85 - Education services. However, it was stipulated that the following are not subject to exemption from lump-sum taxation on recorded revenues:

  • pre-school education services (PKWiU 85.10.10.0),

  • school services allowing to obtain professional certificates and qualifications in the field of ship management and pilotage (PKWiU ex 85.53.12.0).

Therefore, pursuant to the above provisions, pre-school education services may be covered by a lump sum on recorded revenues.

It should be noted that the possibility of paying and the amount of the lump sum on registered revenues obtained in connection with the conducted economic activity depends solely on the actual type of services provided as part of this activity. Therefore, in order to apply the appropriate flat rate to the revenues obtained from the business activity conducted by the taxpayer, it is necessary to assign the type of performed activities to a specific grouping of PKWiU. In the case of running a kindergarten, the flat rate is 8.5%.

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Example 2.

The taxpayer runs a kindergarten together with his partner. It also obtains income from subsidies. A significant part of it is used for the remuneration of the taxpayer who acts as the director of the institution. Taxpayers chose the recorded flat rate as their form of taxation. In this case, can all income be taxed at a lump sum?

Pursuant to art. 21 sec. 1 point 129 of the PIT Act, subsidies, within the meaning of the provisions on public finances, received from the state budget or the budgets of local government units, are free from income tax, subject to para. 36.

The exemption referred to above does not apply to that part of the subsidy received for non-agricultural business activity, which was allocated on the basis of separate provisions for remuneration of a natural person conducting this activity. Thus, the remuneration received as a director may also be taxed at a lump sum.

In this case, we tax the entire taxpayer's revenues in connection with running a kindergarten at the rate of 8.5%.

Summing up, a lump sum for a private kindergarten is possible. His rate is 8.5%.