Unregistered activity (działalność nierejestrowana) is an attractive option for people who want to test their business ideas without registering in CEIDG (Central Register and Information on Economic Activity). However, running such an activity comes with certain tax obligations that often raise questions among taxpayers. One of the most common disputed issues is the taxation of advance payments received for future supplies of goods or services.
The PIT (personal income tax) Act (Article 20 section 1ba in conjunction with Article 11 section 1) provides that advance payments received in unregistered activity are taxable revenue in the year they are received. This rule is crucial for everyone running unregistered activity, because it directly affects the calculation of income tax.
Basic rules of unregistered activity
Unregistered activity can be carried out only by natural persons who are not entered in the Central Register and Information on Economic Activity. This form of economic activity was designed for people testing their business ideas on a small scale.
From 1 January 2026, an activity carried out by a natural person is not a business activity if the revenue due from it does not exceed, in any quarter, 225% of the minimum wage, i.e. PLN 10,813.50 in 2026 (from 1 January 2027: PLN 11,137.50). Until the end of 2025 the limit was monthly and amounted to 75% of the minimum wage. In addition, the person must not have run a business activity in the last 60 months
An important restriction is that unregistered activity cannot be carried out under a civil partnership agreement (spółka cywilna) (Article 5 section 5 of the Entrepreneurs' Law). It is also not available to foreign persons other than those listed in Article 4 sections 1 and 2 of the Act on the participation of foreign entrepreneurs and other foreign persons in economic transactions (Article 5 section 7 of the Entrepreneurs' Law). This rule is meant to prevent circumvention of the regulations on business activity.
Exceeding the revenue limit of PLN 10,813.50 (in 2026) in a given quarter automatically turns the unregistered activity into a business activity. The person must then apply for entry in CEIDG within 7 days of exceeding the limit.
If the 7-day deadline for applying for entry in CEIDG is missed, the revenue from this activity becomes business revenue from the day after the deadline expires. Revenue from the period between exceeding the limit and filing the application or the expiry of the deadline is classified as revenue from other sources
Unregistered activity is free of the obligations typical for entrepreneurs. People running such an activity do not pay income tax advances, do not have to file monthly tax returns, do not pay ZUS (Social Insurance Institution) contributions and do not automatically become active VAT payers – as a rule, they are covered by the subjective VAT exemption (limit PLN 240,000 from 2026). The other conditions of this form, including the revenue limit, are gathered in our guide to the rules of unregistered activity.
Obligations of a person running unregistered activity
Despite the simplifications, unregistered activity comes with specific obligations that natural persons must comply with. The basic requirement is to keep simplified sales records (Article 109 section 1 of the VAT Act – for each day, no later than before the first sale on the following day) and to document costs, which is used to calculate the annual income subject to income tax.
Sales records should be kept chronologically and systematically. Every item of revenue and every expense related to the unregistered activity should be properly documented and recorded. This documentation will be needed when filing the annual PIT-36 tax return (annual return for income taxed on the tax scale).
- Keeping simplified sales records and documenting costs to calculate annual income
- Issuing invoices at the buyer's request if the person is a VAT-exempt taxpayer
- Recording sales on a cash register (kasa fiskalna) after exceeding the limit of PLN 20,000 a year
- Complying with commercial contracts and respecting consumer rights
- Filing the annual PIT-36 return after the end of each year of activity
A natural person running unregistered activity must file an annual PIT-36 return for each year of activity by 30 April of the year following the tax year. The return must include all revenue from the unregistered activity and the expenses incurred in connection with it
Issuing invoices is another obligation that may apply to people running unregistered activity. If the buyer requests an invoice, the person running the activity must issue it, provided that they are a VAT-exempt taxpayer or the sale is VAT-exempt. Recording sales is a separate matter – we cover it in our article on the cash register in unregistered activity.
Recording sales on a cash register becomes mandatory once sales exceed PLN 20,000 in a year, or a proportional amount for the period of sales to consumers. This obligation also applies when the person starts selling goods or services that are not covered by the exemption from using a cash register.
The PIT Act on advance payments in unregistered activity
The provisions of the PIT Act, above all Article 20 section 1ba and Article 11 section 1, are crucial for classifying received advance payments as taxable revenue.
Under Article 20 section 1ba of the PIT Act, revenue from unregistered activity is classified as revenue from other sources, specified in Article 10 section 1 point 9 of the PIT Act. This classification is fundamental to how such revenue is taxed.
Revenue from unregistered activity is determined under the general rules of Article 11 section 1 of the PIT Act. This means that revenue consists of money and monetary values received or made available to the taxpayer, and the value of benefits in kind and other free-of-charge benefits
Under the rule in Article 11 of the PIT Act, revenue from unregistered activity also includes advance payments received for the supply of goods or the performance of a service. The Ministry of Finance's guide to unregistered activity (podatki.gov.pl) also states that, for PIT purposes, revenue consists only of the amounts paid by the customer.
This follows from the cash principle of recognising revenue in unregistered activity. Under this principle, revenue is any amount actually received by the taxpayer, regardless of whether the service has already been performed or is to be performed in the future.
| Type of revenue | Time of recognition | Legal basis | Tax consequences |
|---|---|---|---|
| Payment for a service performed | When received | Article 11 of the PIT Act | Revenue in the year of receipt |
| Advance payment for a future service | When received | Article 11 of the PIT Act | Revenue in the year of receipt |
| Benefits in kind | When received | Article 11 of the PIT Act | Valued at market value |
| Other free-of-charge benefits | When received | Article 11 of the PIT Act | Valued at market value |
Practical consequences of taxing advance payments
Classifying advance payments as taxable revenue when they are received has significant practical consequences for people running unregistered activity. Above all, it affects the amount of income tax payable for the tax year.
Receiving an advance payment in December means it must be included in that year's revenue, even if the service or supply of goods is to take place the following year. This rule may mean that the taxpayer pays tax on revenue before actually performing the service. Once the activity turns into a registered business, we can keep its records and tax settlements as part of our accounting services.
Advance payments received for the supply of goods or the performance of a service in unregistered activity are taxable revenue when they are received, under Article 11 of the PIT Act. It does not matter when the order is actually carried out – tax is due for the year in which the advance payment was received
This is particularly important in the context of the revenue limit for unregistered activity. Receiving an advance payment may cause the quarterly limit of PLN 10,813.50 (in 2026) to be exceeded, which automatically turns the unregistered activity into a business activity requiring registration in CEIDG. However, the limit is calculated on revenue due – amounts due even if not actually received (Article 5 section 6 of the Entrepreneurs' Law) – and not only on payments received.
People running unregistered activity should also remember that they can deduct the costs of earning revenue. These costs can be taken into account when they are incurred, provided they are properly documented and related to the activity.
- Advance payments increase revenue in the year they are received
- They may cause the unregistered activity limit to be exceeded
- They are taxed on the tax scale
- Documented costs can be deducted from them
- They must be entered in the simplified records
Taxation on the tax scale and tax reliefs
Revenue from unregistered activity, including advance payments received, is taxed only on the tax scale (12% and 32%). This means it is not possible to choose the flat 19% tax (podatek liniowy) or other forms of taxation available to entrepreneurs running a business.
Taxation on the tax scale has both advantages and limitations. On the one hand, people running unregistered activity can benefit from the tax-free income amount, which in 2026 is PLN 30,000. On the other hand, revenue from unregistered activity must be combined with other income taxed on the tax scale.
Revenue from unregistered activity is classified as revenue from other sources and is taxed on the tax scale. As a result, this income must be combined with other income taxed on the tax scale, which may affect the amount of tax
An important advantage is the possibility of deducting tax-deductible costs. The taxable income is the difference between the revenue earned and the documented costs actually incurred in connection with the unregistered activity. These costs must be documented with invoices or bills showing the person running the activity as the buyer.
People running unregistered activity are entitled to various tax reliefs when filing the annual PIT-36 return. The most important include the child relief, the IKZE relief (individual retirement security account), the rehabilitation relief, the deduction of ZUS contributions, the internet relief, the thermal modernisation relief and the deduction of trade union membership fees.
A person running unregistered activity in IT received an advance payment of PLN 5,000 in December 2026 for a project that was to be completed in March 2027 (their other revenue in Q4 stayed within the limit). Under Article 11 section 1 of the PIT Act, they had to report the entire advance payment as revenue for 2026, even though the project was only completed the following year. At the same time, they could deduct the costs of carrying out the project only in 2027, when they actually incurred them.
Documenting and recording advance payments
Properly documenting and recording advance payments received is crucial for settling income tax correctly. Every advance payment received must be properly documented and included in the sales records.
The basic document confirming receipt of an advance payment may be an invoice issued by the person running the unregistered activity, a contract with the customer or other documents confirming the transaction. These documents should contain all the necessary information, including the amount of the advance payment, its purpose and the details of the parties to the transaction.
Documents confirming receipt of advance payments in unregistered activity should contain the details of the person running the activity, the amount of the advance payment, its purpose and the date of receipt. Proper documentation is essential when filing the PIT-36 return
Sales records should be kept chronologically, so that all transactions can be traced easily. Each entry in the records should be properly described and dated, which will make the later tax settlement easier.
Particular attention should be paid to situations in which an advance payment is refunded in the same tax year in which it was received. In such a case, the refunded amount should be deducted from revenue, which will affect the final amount of taxable income.
- Issuing an invoice or another document confirming receipt of the advance payment
- Entering the advance payment in the sales records under the date of receipt
- Describing the purpose of the advance payment and the customer's details
- Keeping documents for the period required by law
- Including the advance payment in the annual PIT-36 return
Tax planning in unregistered activity
Knowing that advance payments are taxable revenue when received should be taken into account in the tax planning of people running unregistered activity. This is especially important for managing cash flow and the tax burden.
People expecting larger advance payments should consider their effect on the amount of income tax and the risk of exceeding the unregistered activity limit. In some cases it may be better to spread advance payments over different periods to avoid concentrating revenue in a single tax year.
Planning when advance payments are received can significantly affect the amount of income tax and the possibility of continuing unregistered activity. Exceeding the quarterly limit of PLN 10,813.50 (in 2026; from 1 January 2027: PLN 11,137.50) requires registering a business in CEIDG
Managing tax-deductible costs is also an important part of planning. Since costs can be deducted when they are incurred, it is worth considering how to spread expenses over time to maximise the tax benefits.
People running unregistered activity should also monitor their total income from various sources, because all income taxed on the tax scale is added together when calculating tax. This may affect the tax bracket and the final tax liability.
