Lump sum taxation, part II
Who can benefit from taxation with a tax card?
A tax card is a quite specific form of taxation that can be used by a small group of taxpayers. Art. 23 sec. 1 of the Lump-sum Income Tax Act indicates that the flat-rate income tax in the form of a tax card may be paid by taxpayers conducting business activity:
- service or manufacturing and service,
- service in the field of retail trade in food, beverages, tobacco and flowers, with the exception of beverages with an alcohol content above 1.5%
- service in the field of retail trade in non-food products, with the exception of trade in motor fuels, means of motor transport, parts and accessories for motor vehicles, agricultural tractors and motorcycles, and with the exception of trade in non-food products covered by the license,
- gastronomic - if there is no sale of beverages with an alcohol content of more than 1.5%,
- in the field of transport services performed with the use of one vehicle,
- in the field of entertainment services,
- for the sale of home meals in apartments, if there is no sale of beverages with an alcohol content above 1.5%,
- in liberal professions, consisting in the provision of services in the field of human health protection,
- in professional professions, consisting in the provision of veterinary services by veterinarians, including the sale of veterinary preparations (PKWiU ex 126.96.36.199, ex 188.8.131.52, ex 184.108.40.206 and ex 220.127.116.11), in connection with the services provided,
- in the field of home care for children and the sick,
- in the field of educational services, consisting in giving lessons by the hour.
In addition, the taxpayer must meet certain conditions in terms of the number of employees and the size of the city in which the activity is conducted. These parameters - the type of activity, the number of employees, the number of inhabitants of the town - determine the amount of tax that the taxpayer will be obliged to pay.
Taxpayers conducting the above-mentioned types of activities are subject to taxation in the form of a tax card, if:
- submit an application for taxation in this form,
- in the application referred to above, they will report the activity listed in one of the 12 parts of the table constituting Annex 3 to the Act,
- when running their business, they do not use the services of people who are not employed by them under a contract of employment and the services of other enterprises and plants, unless it is specialized services,
- they do not conduct, apart from one of the activities listed in art. 23, other non-agricultural economic activity,
- the taxpayer's spouse does not operate to the same extent,
- they do not produce products subject to excise duty on the basis of separate regulations,
- the non-agricultural economic activity reported in the application is not conducted outside the territory of the Republic of Poland.
If you choose a tax card, the taxpayer must submit a PIT-16 form. It may be attached to the CEIDG-1 application or submitted to the competent head of the tax office.
This application is submitted to the head of the tax office competent according to the location of the organized establishment, indicated in the application to the register of economic activity, and in the event of failure to comply with the obligation to report the activity to the register or if the activity is carried out without having an organized establishment - to the head of the tax office competent according to the place of residence of the taxpayer or the registered office of the company, and if the registered office of the company cannot be determined - the head of the tax office competent according to the place of residence of one of the partners. If the activity is carried out in several organized establishments in the area covered by the local jurisdiction of several heads of tax offices, jurisdiction shall be determined according to the place indicated by the taxpayer as the registered office of the activity.
Tax card taxation rules
The head of the tax office, after considering the taxpayer's request, issues a decision in which he determines the amount of income tax in a fixed amount for a given tax year.
The entrepreneur must remember that in a situation where the conditions for running a business change during the tax year, he must notify the head of the tax office about it.
The tax in the form of a tax card in the amount specified in the decision is reduced by the taxpayer by the amount of the health insurance premium paid, if this amount has not been deducted from income tax. The amount of the deduction may not exceed the amount corresponding to 7.75% of the contribution assessment basis.
Tax payments should be made monthly by the 7th of each month for the previous month, and for December - by December 28 of a given tax year.
By 31 January of the year following the tax year, the taxpayer is required to submit to the tax office the PIT-16A annual tax return, which shows the amounts of health insurance contributions paid and deducted from tax in each month.
Advantages and disadvantages of a tax card
The advantages of the tax card include:
- no accounting obligation,
- usually a low tax rate regardless of actual earnings.
However, when talking about the disadvantages of this form of taxation, it can be mentioned that:
- a fixed tax rate is not beneficial for taxpayers who did not achieve revenues in a given tax period or who suffered a loss,
- there is no entitlement to any deductions and tax credits (except for the deduction of health insurance contributions).