The small business VAT exemption (zwolnienie podmiotowe z VAT) is a significant relief for small entrepreneurs, allowing them to run a business without having to account for VAT. The topic is particularly interesting for accounting offices (biura rachunkowe), which provide bookkeeping services and often sit on the borderline between permitted accounting services and tax advice, which is excluded from the exemption.
The VAT Act specifies precisely which entities may use the small business VAT exemption and which types of business are excluded from it. Accounting offices are in a special position, because the nature of the services they provide may decide whether they can use the exemption.
Basic conditions of the small business VAT exemption
The small business VAT exemption is available to taxpayers whose place of business is in Poland and whose sales (excluding tax) did not exceed PLN 240,000 net in either the previous or the current tax year – this limit has applied since 1 January 2026; until the end of 2025 it was PLN 200,000. This key limit is set out in Article 113(1) of the VAT Act and is the basic criterion for access to the exemption.
The PLN 240,000 net limit (until 2025 – PLN 200,000) applies to the value of sales in the previous and the current tax year. Exceeding this threshold means losing the right to the small business VAT exemption. The amount is calculated net, without VAT
The exemption is also available to taxpayers who start a business during the year, if their expected sales do not exceed PLN 240,000 in proportion to the period of business activity in the tax year (Article 113(9)). This means that new entrepreneurs can use the exemption if their forecast turnover does not exceed the limit calculated in proportion to the period of activity.
A practical example of this rule is an entrepreneur who set up a JDG (sole proprietorship) on 2 November 2025. At the end of the year, their sales amounted to PLN 20,000. The VAT exemption limit calculated in proportion to the number of days of activity is PLN 32,876.71 (the 2025 limit of PLN 200,000 × 60 days/365 days). Since actual turnover did not exceed the proportional limit, the entrepreneur may use the exemption in the following year.
New entrepreneurs can use the small business VAT exemption if their expected turnover does not exceed the PLN 240,000 limit in proportion to the period of activity. In practice, the proportional calculation takes into account the number of days of activity in the tax year
Sales excluded from the exemption limit
The VAT Act specifies precisely which types of sales do not count towards the PLN 240,000 sales limit. Under Article 113(2) of the VAT Act, several categories of transactions are not included in the value of sales.
The first category is intra-Community distance sales of goods that are not taxable in Poland. Similarly, distance sales of imported goods that are not taxable in Poland are not included.
A significant category covers supplies of goods and services for consideration that are exempt from tax under Article 43(1) or regulations issued under Article 82(3). However, this exclusion has its limits and does not apply to all exempt transactions.
The exclusion from the limit does not apply to real estate transactions, certain services listed in Article 43(1)(7), (12) and (38)-(41), or insurance and reinsurance services, unless these are ancillary transactions
The last category is supplies for consideration of goods that the taxpayer classifies, under income tax rules, as fixed assets or intangible assets subject to depreciation. This exclusion is meant to prevent a one-off sale of an expensive fixed asset from depriving the entrepreneur of the exemption. From 1 January 2027, however, the value of sales will also include the transfer of the taxpayer's own goods from Poland to another EU country (Article 113(1a) in conjunction with Article 13(3) of the VAT Act, added by the Act of 4 September 2026, Journal of Laws (Dz.U.) 2026 item 1270).
Waiving and losing the exemption
A taxpayer may voluntarily waive the small business VAT exemption, which may be beneficial when trading with VAT-registered partners. The waiver requires a written notification to the head of the competent tax office (urząd skarbowy) before the beginning of the month from which the waiver is to apply, and when waiving it from the first transaction of a new business – before the day of that transaction (Article 113(4) of the VAT Act).
In practice, the waiver is made using the VAT-R form (the VAT registration application or its update – Article 96(5)(3)), which is the official form for matters related to VAT registration. The form is used both to waive the exemption and to report updates to your data.
- Prepare the VAT-R form with the relevant waiver details
- File the form before the beginning of the month from which the waiver is to apply
- Receive the UPO (official confirmation of receipt) when filing electronically (the office issues confirmation of registration only on request – Article 96(4))
- Start accounting for VAT from the month indicated
- Keep VAT records in line with the applicable rules
The waiver of the small business VAT exemption must be notified before the beginning of the month from which it is to apply. You cannot waive the exemption retroactively. In practice, the waiver notification is the VAT-R application or its update
If the PLN 240,000 limit is exceeded, the exemption ceases to apply by operation of law – from the transaction that took you over the limit (Article 113(5) of the VAT Act). The taxpayer must then charge VAT on the whole transaction that caused the limit to be exceeded. This means that not only future transactions, but also the specific transaction that caused the excess, are taxable.
After losing or waiving the exemption, a taxpayer may use it again no earlier than one year after the end of the year in which they lost or waived it (Article 113(11)). Using the exemption again requires meeting all the conditions and filing an updated VAT-R form.
Taxpayers excluded from the small business exemption
Article 113(13) of the VAT Act specifies precisely the categories of taxpayers who cannot use the small business VAT exemption, regardless of their turnover. These exclusions apply both to certain types of goods and to specific services.
The first significant category covers taxpayers supplying goods listed in Annex 12 to the Act. Taxpayers supplying excise goods are also excluded, although with exceptions covering electricity, tobacco products and certain categories of passenger cars.
| Excluded category | Examples | Legal basis | Notes |
|---|---|---|---|
| Goods listed in Annex 12 | Specific goods listed in the annex | Article 113(13) | Full exclusion |
| Excise goods | Alcohol, fuels (with exceptions) | Article 113(13) | With certain exceptions |
| Real estate | Buildings, structures, building land | Article 113(13) | Applies in certain cases |
| New means of transport | Cars, motorcycles | Article 113(13) | As defined in the Act |
Particularly important for e-commerce is the exclusion for certain goods sold under an organised system for concluding distance contracts. It covers cosmetic and toilet preparations, computers, electronic and optical products, electrical equipment and machinery and equipment not elsewhere classified.
The exclusion from the small business VAT exemption also covers wholesale and retail sales of parts and accessories for motor vehicles and motorcycles. This applies to both traditional and online sales of these goods
Services excluded from the exemption
In addition to certain categories of goods, the Act excludes from the small business exemption taxpayers providing certain types of services. These exclusions are crucial for accounting offices and other professional service providers.
The first category of excluded services is legal services, which covers all forms of legal activity, regardless of how it is carried out. The second important category is advisory services, except very specific agricultural advice related to growing and breeding plants and rearing and breeding animals, as well as to preparing farm development and modernisation plans.
- Legal services – regardless of who provides them
- Tax and financial advisory services
- Jewellery services
- Debt collection services, including factoring and recovery
The exclusion of advisory services from the small business VAT exemption is broad and covers most forms of professional advice. The only exception is very specific agricultural advice related to farm production and planning
Jewellery services and debt collection services, including factoring, are also excluded (Article 113(13)(2)(c) and (d) of the VAT Act). These exclusions apply regardless of turnover.
New rules from 2025
On 1 January 2025, a new Article 113a was introduced, establishing the SME scheme (Small and Medium Enterprises) for taxpayers from other European Union countries. Under this scheme, taxpayers from other EU countries are exempt from VAT in Poland if their annual turnover in the whole EU does not exceed EUR 100,000 and their sales in Poland are within the national limit in Article 113(1) (Article 113a(1)). Polish taxpayers can use a similar exemption in other EU countries (Article 113b).
This new regulation aims to harmonise the rules on exemptions for small businesses within the European Union and to make cross-border business easier. Amounts in foreign currencies are converted into złoty for the national limit at the European Central Bank exchange rate from the first day of the year (Article 113a(8)).
Accounting offices and the small business VAT exemption
The position of accounting offices with regard to the small business VAT exemption is particularly complex because of the specific nature of their services. The key is to distinguish between accounting services and tax advisory services, which are excluded from the exemption.
The general tax ruling of the Minister of Finance (described below) shows that an accounting office can use the small business VAT exemption if it meets certain conditions. The first condition is the sales limit – staff qualifications do not matter here: the exemption applies "regardless of status or holding specific qualifications", including when a licensed tax adviser works at the office. The second condition concerns the nature of the services – the office may keep books and records and prepare tax returns, also as a separate service, but it may not give tax advice or represent clients before the authorities.
The accounting office "Księgowość Plus" provided bookkeeping services to small businesses for five years. It kept books and records and prepared VAT and PIT returns, but did not give clients tax advice or represent them before the authorities. As a result, the office could use the small business VAT exemption as long as its sales did not exceed the limit (until 2025 PLN 200,000, from 2026 PLN 240,000 a year).
The third issue concerns the classification of services under PKWiU (the Polish Classification of Products and Services). Accounting, audit and tax advisory services fall within a single group, PKWiU 69.20, and Article 113(13)(2)(b) of the VAT Act does not refer to PKWiU. Neither the classification symbol nor the PKD (business activity) code given at registration therefore decides on the exemption – what matters is the actual nature of the services. If the office actually gives tax advice, the small business VAT exemption will not be available.
The PKWiU classification of services does not decide whether an accounting office can use the small business VAT exemption. The exemption is ruled out by actually providing advisory or legal services, not by the code in the registration documents alone
The Ministry of Finance ruling
The Ministry of Finance issued a general tax ruling of 9 April 2015, ref. PT3.8101.2.2015.AEW.16, which explains which tax advisory activities exclude the exemption under Article 113 of the VAT Act. This ruling is crucial for accounting offices, because it sets the boundary between permitted accounting services and excluded advice.
The ruling points out that, under Article 2(1) of the Tax Advisory Act as it stood at the time, tax advisory activities covered four main categories (from 1 March 2026 the list was extended, among others, to information and reporting obligations – point 3a – and the audit of the tax function – point 5; Journal of Laws (Dz.U.) 2025 item 1882). It also notes that for VAT purposes this definition is only of auxiliary importance. The first category is giving taxpayers, payers and collectors, at their request or on their behalf, advice, opinions and explanations on their tax and customs obligations and on administrative enforcement related to those obligations.
The second category is keeping, in the name and on behalf of taxpayers, payers and collectors, accounting books, tax books and other records for tax purposes, and helping them in this respect. The third category is preparing, in the name and on behalf of taxpayers, payers and collectors, tax returns and declarations or helping them in this respect.
According to the ruling, keeping books and records and preparing tax returns and declarations are not advice within the meaning of Article 113(13)(2)(b) of the VAT Act – they are accounting and technical in nature. The exemption is ruled out only by giving tax advice, opinions and explanations (point 1)
The fourth category is representing taxpayers, payers and collectors in proceedings before public administration authorities and in the judicial review of decisions, orders and other administrative acts in tax matters. According to the ruling, such activities are as a rule legal services, which also exclude the exemption.
Practical tips for accounting offices
Accounting offices that want to use the small business VAT exemption should be particularly careful when defining the scope of their services. The key is to avoid activities that could be classified as advice (tax advice, opinions, explanations) or legal services.
The first step is to define the business activity correctly when registering the business. PKD and PKWiU codes should correspond to accounting services, although on their own they do not decide on the exemption. The second step is to shape the service offer appropriately – it may include keeping books and preparing tax returns, but not tax advice.
The third important element is documenting the nature of the services provided. Contracts with clients should clearly define the scope of services (books, records, returns) and not include tax advice or representation before the authorities. The fourth element is avoiding services that clearly fall within tax advice, such as representing clients before the tax authorities or giving detailed tax advice.
Accounting offices should keep detailed documentation of their services so that, in the event of an inspection, they can show that their activity falls within accounting services and not tax advice. Proper documentation can be crucial for keeping the right to the exemption
Inspection and verification of eligibility
The tax authorities may verify whether accounting offices use the small business VAT exemption correctly. An inspection may include an analysis of the services provided, contracts and invoices, and the way the business is documented. Particular attention is paid to whether the nature of the services matches the declared scope of activity – a staff member's tax adviser licence alone does not rule out the exemption.
If irregularities are found, the tax authority may challenge the right to the exemption and assess a VAT arrear together with late-payment interest. That is why accounting offices should regularly check that their activity complies with the law and, if in doubt, seek professional advice or apply for individual tax rulings (KIS).
