In 2026 several new or increased tax limits apply in Poland, affecting the choice of taxation method and the obligations of business owners. From 1 January 2026 the VAT exemption limit is PLN 240,000 (previously PLN 200,000), the revenue limit for the cash method in PIT (personal income tax) is PLN 2,000,000 (previously PLN 1,000,000), and the limits on the value of a car recognised as a cost are PLN 100,000, PLN 150,000 (CO2 emissions below 50 g/km) or PLN 225,000 (electric and hydrogen cars). Unregistered activity is possible with revenue of up to PLN 10,813.50 per quarter (from 1 January 2027 PLN 11,137.50), and the exemption from using a cash register (kasa fiskalna) as a rule covers sales to private individuals of up to PLN 20,000 a year.
Other thresholds have not changed in euro, but their value in złoty depends on the euro exchange rate – this applies, among others, to the limit for ryczałt, small taxpayer status for VAT and CIT (corporate income tax) and the threshold for keeping accounting books (EUR 2,500,000 of net revenue). Because the euro rate on 1 October 2025 was lower than a year earlier, in 2026 these thresholds are slightly lower in złoty than in 2025, and from 2027 they are higher. This does not bring real financial benefits for everyone. For businesses that exceed the limits or operate business models based on high tax-deductible costs, it may mean changing the taxation method or – after exceeding the accounting books threshold – switching to full accounting.
The cash method in PIT (Article 14c of the PIT Act) has applied since January 2025, and from 1 January 2026 it is available to business owners with revenue of up to PLN 2,000,000 in the previous year. Revenue arises on the day payment is received, but no later than 2 years after the invoice is issued, so the tax on unpaid receivables can be deferred
It is worth analysing the applicable limits carefully, because decisions made early enough can help not only to reduce the tax burden but also to avoid problems with the tax authorities. The right choice of taxation method can make a noticeable difference to the amount of tax you pay.
Flat-rate tax on recorded revenue - limit unchanged
Contrary to some announcements, the revenue limit that entitles you to the flat-rate tax on recorded revenue (ryczałt) has not increased. In 2026 ryczałt can be paid by a business owner whose business revenue in 2025 did not exceed EUR 2,000,000 (Article 6 section 4 of the Act on flat-rate income tax; for a partnership, the total revenue of the partners counts). The amount is converted at the average NBP euro rate from the first business day of October of the year preceding the tax year (Article 4 section 2 of that Act), which gives PLN 8,517,200 for 2026 and PLN 8,754,000 for 2027. A business owner starting a business can choose ryczałt regardless of the amount of revenue in the first year.
Ryczałt is widely regarded as one of the simplest and most transparent taxation methods in the Polish tax system. Its biggest advantage is that the taxpayer does not have to keep complicated accounts - a revenue register is enough. What is more, the business owner does not settle tax-deductible costs, which greatly simplifies all the formalities of running a business.
Ryczałt rates are fixed in advance and depend on the type of business activity – from 2% to 17% of revenue (Article 12 of the Act on flat-rate income tax). This allows business owners to predict their tax burden in advance and plan the company's finances better
The EUR 2,000,000 limit covers a large share of small and medium-sized businesses. However, it is worth analysing the cost structure of your business in great detail and checking carefully whether the simplified settlement model will actually bring real financial savings compared with the other available taxation methods.
Businesses that exceeded the limit in 2025 cannot use ryczałt in 2026 and are taxed under the tax scale (12% and 32%) or the flat 19% tax (podatek liniowy). They can return to ryczałt in a later year if their revenue for the previous year falls within the limit again and their specific business model allows simplified settlements.
Business owners running service, trade or craft businesses with revenue below the limit can reconsider this taxation method every year – the statement choosing ryczałt is filed by the 20th of the month following the month in which the first revenue of the year was earned (Article 9 section 1 of that Act). This applies in particular to businesses in sectors with high turnover but relatively low operating costs.
Small taxpayer limit for VAT and CIT - stable rules
As with ryczałt, the limit for small taxpayer status in VAT, PIT and CIT remains at EUR 2,000,000 of sales value (including VAT) in the previous year. In 2026 this corresponds to PLN 8,517,000, and from 1 January 2027 to PLN 8,754,000. For 2025 the limit was PLN 8,569,000 – the differences result solely from the NBP euro rate on the first business day of October of the previous year (Article 2 point 25 of the VAT Act).
Small taxpayer status comes with a number of important simplifications and tax benefits that help business owners in their day-to-day operations and can translate into measurable financial savings.
A small VAT taxpayer can file VAT returns once a quarter instead of monthly (Article 99 sections 2–3 of the VAT Act) and pay the tax quarterly. This is a major help for cash flow, because businesses have more time to collect the funds needed to pay the tax. However, quarterly settlements cannot be used, among others, during the first 12 months after registration as an active VAT taxpayer
Quarterly VAT settlement also means fewer administrative obligations - instead of 12 returns a year, small businesses file 4 VAT returns, although the JPK_V7K file (VAT return with records, SAF-T file) with the records part is still sent every month. This saves time and also reduces the risk of errors in the settlements.
For CIT and PIT purposes, a small taxpayer (and a taxpayer starting a business) is entitled to one-off depreciation of fixed assets in groups 3–8 of the Classification (excluding passenger cars) up to EUR 50,000 a year as de minimis aid, which in 2026 means PLN 213,000 and from 1 January 2027 PLN 219,000 (Article 22k section 7 of the PIT Act, Article 16k section 7 of the CIT Act). This rule allows the purchase of machines, equipment, computer hardware or other such fixed assets to be recognised as tax-deductible costs in one go, without spreading depreciation over subsequent years.
One-off depreciation is particularly useful for businesses that invest heavily in developing and modernising their equipment. Recognising significant capital expenditure as a cost in one go brings the tax reduction forward – it does not, however, increase the total amount of costs, it only shifts them in time.
A company whose revenue in a given tax year did not exceed the equivalent of EUR 2,000,000 can, as a rule, apply the preferential 9% CIT rate instead of the standard 19% rate (Article 19 section 1 point 2 of the CIT Act), excluding, among others, income from capital gains and companies created through transformations in their first two years. It is one of the most important tools supporting the development of the small and medium-sized business sector
Preferential CIT taxation at 9% can mean a tax burden less than half of that at the standard rate. For a company with annual income of PLN 500,000, the difference between the 9% and 19% rates means a saving of PLN 50,000 a year.
Flat tax and tax scale - thresholds unchanged
The tax scale thresholds and the flat tax rate have not changed in 2026. What does affect the attractiveness of each taxation method are the rules for calculating and deducting the health insurance contribution, which differ between the tax scale, the flat tax and ryczałt.
Since 2022 the first threshold of the tax scale has been PLN 120,000 a year, and the tax-free amount PLN 30,000. In 2026 the rate structure is as follows:
- A 12% rate for income up to PLN 120,000 a year
- A 32% rate for income above PLN 120,000 a year
- The flat tax keeps a fixed rate of 19% regardless of income
- The health insurance contribution for the flat tax is 4.9% of income (no less than PLN 432.54 a month from February 2026 to January 2027)
- The health insurance contribution is not deducted from tax; under the flat tax it can reduce income – in 2026 up to PLN 14,100 a year
The tax scale is particularly beneficial for small business owners with moderate income. In practice, the tax-free amount and the 12% rate up to PLN 120,000 of income mean lower tax than at the flat rate, although the health insurance contribution under the tax scale is 9% of income and cannot be deducted.
The flat tax still has a fixed rate of 19 percent, regardless of the business owner's income. For people with very high income it can be an attractive solution, because it avoids entering the higher 32 percent threshold of the tax scale
The health insurance contribution calculated on income remains a significant burden for flat-tax payers. It amounts to 4.9% of income and cannot be deducted from tax, while the deduction from income is capped at PLN 14,100 a year, which in practice increases the real tax cost. For business owners with very high income, the effective rate including both tax and the health insurance contribution approaches 24%.
As a result, the flat tax is not always more profitable than ryczałt or a well-considered settlement under the tax scale, especially for business owners with moderate income. The choice of taxation method should be preceded by a detailed financial analysis that takes all elements of the tax burden into account.
| Taxation method | Basic rate | Health insurance contribution | Effective burden | Advantages |
|---|---|---|---|---|
| Tax scale | 12% / 32% | 9% of income, not deductible | 12-32% + 9% contribution | Tax-free amount, progressivity, reliefs |
| Flat tax | 19% | 4.9% of income, deductible from income up to PLN 14,100 | ~24% | Fixed rate |
| Ryczałt | 2-17% | Fixed amount by revenue bracket, 50% deductible from revenue | 2-17% + contribution | Simple settlements |
Cash-basis PIT - a new option for small businesses
Since 1 January 2025 a new settlement option has been available - cash-basis PIT (the cash method of recognising revenue, Article 14c of the PIT Act), which allows business owners to recognise revenue when they actually receive payment for issued invoices. The solution aims to improve businesses' cash flow by limiting the need to pay tax on invoiced but still unpaid receivables. The cash method can also be used by business owners on ryczałt (Article 6 section 1g of the Act on flat-rate income tax).
Cash-basis PIT is available to business owners who meet the following strictly defined conditions:
- Revenue from business conducted on their own in the previous tax year must not exceed PLN 2,000,000 (from 1 January 2026; in 2025 – PLN 1,000,000)
- The business owner must not keep accounting books
- A written statement choosing the cash method must be filed with the head of the tax office (urząd skarbowy) by 20 February of the tax year (when starting a business during the year – by the 20th of the month following the month in which it started)
- The method applies only to revenue from transactions with other businesses documented with invoices
- The method does not apply to transactions with related parties or entities in tax havens, or to the sale of fixed assets
Cash-basis PIT is particularly useful for businesses providing services with long payment terms or operating in sectors where late payments are common. Thanks to it, business owners do not have to pay tax on money they have not actually received yet – however, no later than 2 years after the invoice is issued, revenue must be recognised even without payment
The introduction of cash-basis PIT is a significant help for small businesses, which often struggle with cash-flow problems caused by late payments from customers. Previously, business owners had to pay tax on issued invoices regardless of whether they had been paid, which often meant that the business had to finance the tax from other sources.
The cash method is particularly attractive for businesses in sectors with long payment cycles, such as construction, B2B services or wholesale trade. In practice it can mean a significant shift of the tax obligation in time, which translates into better cash flow and the ability to reinvest funds in the development of the business.
A consulting firm issued invoices of PLN 100,000 a month, but the average payment time from customers was 60 days. Thanks to cash-basis PIT, the business owner can defer the tax payment by those 60 days – on an ongoing basis they do not pay tax on around PLN 200,000 of receivables that have not yet been paid, which permanently improves the firm's cash flow.
Who gains from the changes
The limits applicable in 2026 bring measurable benefits to several groups of business owners, although the scale of these benefits varies depending on the specific nature of the business.
The biggest beneficiaries are the smallest businesses selling to private individuals and business owners with long payment terms. Thanks to the increase in the VAT exemption limit from PLN 200,000 to PLN 240,000, more businesses can remain outside VAT, and doubling the cash method limit to PLN 2,000,000 allows a much wider group of businesses to use it. This applies especially to service, trading and IT businesses, where the main cost is often just the owner's work.
Small CIT and VAT taxpayers keep their existing simplifications, such as quarterly VAT settlement and one-off depreciation, and companies with revenue of up to EUR 2,000,000 keep the preferential CIT rate of 9 percent. The limits in euro have not changed, and in złoty they are slightly lower in 2026 than in 2025 – from 2027 they will rise with the euro rate
Another group of beneficiaries are people taxed under the tax scale with moderate income. The tax threshold has remained at PLN 120,000 and the tax-free amount at PLN 30,000, so their burden is stable. This applies especially to business owners who are not approaching the second tax threshold.
Businesses starting out or planning significant growth in turnover can also benefit from the current rules. Higher limits for the VAT exemption and the cash method mean the possibility of using tax simplifications for longer, which can translate into lower costs of running the business in the early stage of its development.
Business owners providing services with long payment terms can use cash-basis PIT, which can significantly improve their financial situation. This applies especially to businesses in sectors where late payments are common and can reach several months.
- Service businesses with high turnover and low operating costs
- Trading businesses using simple business models
- Small manufacturing businesses that do not exceed the limits
- Start-ups and growing businesses planning expansion
- Consultants and freelancers with high revenue per client
- IT businesses providing services to companies
Who may lose under the new rules
Not all business owners will benefit from the changes. Some groups may even feel negative effects of the new rules, especially if they do not adjust their tax strategy accordingly.
Business owners whose activity involves very high tax-deductible costs may end up losing if they choose the wrong taxation method. For businesses with large material, staff or operating costs, ryczałt will not be beneficial, because it does not allow actual business costs to be deducted. Even if they fall within the revenue limit for ryczałt, such businesses may pay more tax if they choose ryczałt instead of the other available methods.
Flat-tax payers with very high income may feel the negative effects of the limited deduction of the health insurance contribution. Although the 19 percent flat rate remains unchanged, the contribution of 4.9% of income, deductible from income only up to PLN 14,100 a year, increases the effective tax burden
Capital-intensive businesses that require continuous investment in equipment, machinery or infrastructure may not fully benefit from the new options. Ryczałt does not allow depreciation of fixed assets or deduction of financing costs, which may mean a higher tax burden than under other taxation methods.
Business owners who have exceeded the limits and are forced to change their taxation method may also feel negative effects. Switching from ryczałt to the flat tax or the tax scale as a rule means keeping a KPiR (tax revenue and expense ledger) and documenting costs; full accounting is required only after exceeding EUR 2,500,000 of net revenue for the previous year, which generates additional costs.
Large service businesses with high staff costs may not benefit from ryczałt even within the limit, because the inability to deduct the costs of salaries, ZUS (Social Insurance Institution) contributions or other operating costs may make other taxation methods more favourable.
A construction company with revenue of EUR 1.8 million a year but material and subcontractor costs of EUR 1.6 million will not benefit from switching to ryczałt, even though it is within the limit. Ryczałt of 5.5% on the entire revenue would be much higher than the flat 19% tax together with the health insurance contribution on income of EUR 0.2 million.
Tax planning for 2026
Given the applicable limits, business owners should carry out a comprehensive analysis of their tax situation and consider adjusting their taxation method to their circumstances. The key is to understand that the most favourable taxation method depends not only on the amount of revenue, but also on the cost structure, the specific nature of the sector and the company's development plans.
The first step should be a careful analysis of the structure of revenue and costs over recent years and a forecast of their shape in 2026 and 2027. On this basis you can assess which taxation method will be the most financially favourable.
Business owners approaching the limits for tax simplifications should calculate the consequences of exceeding them in advance. Revenue and costs must be recognised in line with the rules on when they arise – artificially shifting revenue in time may be challenged by the tax authorities.
Businesses planning significant investments should analyse especially carefully the option of one-off depreciation for small taxpayers. The amount of EUR 50,000 a year (PLN 213,000 in 2026) can cover a large part of planned purchases of equipment or fittings
Business owners providing services with long payment terms should consider switching to cash-basis PIT if they meet the required conditions. This can significantly improve cash flow, especially in sectors with seasonality or irregular payments.
It is also important to monitor changes in the law and how the tax authorities interpret them. New rules may be interpreted differently in practice, so it is worth following case law and the positions of the tax administration.
Businesses should also consider consulting tax advisers, especially if they plan significant changes to their taxation method. A professional analysis can help avoid costly mistakes.
Practical aspects of implementing the changes
Implementing new tax rules requires proper organisational and procedural preparation. Business owners must not only decide on the most favourable taxation method, but also make sure it is implemented properly.
Filing the relevant statements and returns on time is crucial. For cash-basis PIT, the statement choosing this method must be filed by 20 February of the tax year. A change of taxation method (tax scale, flat tax, ryczałt) is notified by the 20th of the month following the month in which the first revenue of the year was earned, or by the end of the year if the first revenue was earned in December.
Business owners planning to change their taxation method should carefully analyse the consequences of this decision for their bookkeeping. Switching from ryczałt to the tax scale or the flat tax means keeping a KPiR instead of a revenue register, and full accounting is required only after exceeding the threshold of EUR 2,500,000 of net revenue, which involves additional costs and obligations
It is also important to prepare appropriate record-keeping and accounting systems. Different taxation methods require different scopes of documentation and records, so it may be necessary to adapt the tools and procedures you use.
Businesses should also train their finance and accounting teams on the new rules. Employees responsible for tax settlements must be aware of the changes and their practical consequences for day-to-day work.
It is also important to prepare for possible tax inspections. Changes in the taxation method or the use of new reliefs may attract the attention of the tax authorities, so it is worth keeping proper documentation of all decisions and settlements.
The effectiveness of the chosen strategy should be monitored on an ongoing basis. Regularly analysing the tax burden and comparing it with alternative solutions will allow any adjustments to be made in subsequent years.
