August 22 is the deadline for changing the form of taxation

After selecting the tax scale, the taxpayer will be able to use the full tax-free amount (PLN 30,000) in the settlement for 2022. It will fall to the second tax threshold after exceeding the amount of PLN 120 thousand. zloty. Importantly, the income from the first half of the year, which was still settled on a lump-sum basis, will not be taken into account to these limits. Therefore, the transition to a tax scale may be profitable for many entrepreneurs.

The benefits of changing the form of taxation will be felt by all those who achieve revenues of up to PLN 135,000 in the second half of the year. PLN (and for the whole year – PLN 270 thousand), with a large ZUS paid and a flat rate of 17 percent. The profit is small in this situationbecause it will amount to about PLN 100, but the lower the taxpayer’s revenues in the second half of the year, the greater the benefit.

For example – for revenues of PLN 200,000 PLN during the year (PLN 100,000 in each six months) and at a flat rate of 17%, switching to the scale in the middle of the year gives a benefit of about PLN 3,000. zloty. On the other hand, if the taxpayer applies the general, most popular rate for services – 8.5 percent. and reaches 130 thousand. PLN of revenue per year (PLN 65 thousand for each half-year), then with a change in the middle of the year, it will gain about PLN 900 (excluding costs).

The level of achieved benefits will therefore depend mainly on the flat rate, the value of revenues generated in the second half of the year and costs that lower the tax base. Moreover, choosing a mid-year scale may be even more advantageous for the taxpayer if he incurs costs. The current lump sums may consider whether to equip the company with, for example, a new computer or other assets in the second half of the year. The scale will give them the opportunity to charge for it, which they cannot do on the lump sum. The six-month “window” is a great opportunity for such purposes.

After switching to the tax scale from the middle of the year, it will not be possible to settle accounts for 2022 together with the spouse. The taxpayer will also not be able to take advantage of the preferential settlement for single parents. However, he will be entitled to a pro-family tax relief, i.e. a tax reduction of PLN 1,112 for the first and second child, PLN 2,000 for the third and PLN 2,700 for the fourth and each subsequent child.

The health insurance contribution due for July, i.e. payable in August, will be the minimum value – PLN 270.90 for all those who change the form of taxation from the middle of the year. This is because you would have to use your June income to calculate your health insurance contribution on the tax scale. At that time, however, the taxpayer was still on a lump-sum basis, so the income cannot be used in this situation. This is certainly good news for taxpayers. Only the health insurance contribution for August, payable in September, will be calculated classically as 9% of the income from July.

Importantly, the taxpayer should inform ZUS about the change in the form of taxation only in May 2023, by submitting the ZUS DRA form for April 2023. Then he will have to mark a special field informing that he changed the form of taxation last year and switched to the tax scale.

It is worth remembering the date – May 2023 also because then you will be able to pay any underpayment of the health insurance until May 22 or apply for a refund of the excess premium. Importantly, you can only apply for a refund in May. If the taxpayer misses this deadline, he will not receive a refund.

If the taxpayer changes the form of taxation for 2022, he will have to submit two PITs in 2023: PIT-28 for the lump sum and PIT-36 for the tax scale. From next year, the deadlines for submitting PITs will be simplified and everyone will have to do so until April 30.

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It should also be remembered that the change in the form of taxation in CEIDG by August 22 this year. is binding for the following years. It will still apply to the taxpayer even if it does not change it in 2023. So if someone wants to return to the lump sum payment, they should remember to change the CEIDG entry again at the beginning of the year.

Piotr Juszczyk, chief tax advisor at inFakt

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