When can you suspend your business?
Suspending a business means a pause in pursuing business activity.
You can suspend a business registered in CEIDG provided that you do not employ any employees.
The main benefit of suspending a business is that during the suspension period you do not have to pay contributions to ZUS or income tax – during this period you do not make any tax advance, lump-sum tax or tax card payments.
You do not have to file your ZUS forms or VAT returns either.
During the suspension period, you may not pursue business activity or receive current revenues from such activity.
You can suspend your business:
- for any reason, for instance, if you have temporary problems with running your business, your income is lower than expected, you are considering a job offer which involves employment, or if you are not able to devote enough time to your business due to personal reasons
- for any period of time (including indefinitely) which, however, may not be shorter than 30 days
- as many times as you need
The start date of the suspension period may be the same as the date of filing the application to suspend your business to CEIDG. You may also indicate a date before or after the date of filing the application.
After resuming business activity following a period of suspension, you can suspend your business again at any moment of your choice. When suspending your business again the same rules apply.
On 12 April 2020, Marta applied to CEIDG to suspend her hairdressing business, indicating 15 March 2020 as the start date of the suspension period.
How to suspend a one-person business
You must notify CEIDG that you have suspended or wish to suspend your business.
This information will be then forwarded by CEIDG to ZUS/KRUS, the head of the relevant tax office, and to Poland Statistics (GUS).
Please note! If your business is taxed under the tax card system, then regardless of the procedure of suspending your business, you may notify the head of the tax office of any pause in your business activity longer than 10 consecutive days, on the start date of such pause at the latest. If you do that, you do not have to pay the tax in the amount of 1/30 of the monthly tax payment for each day of the pause in your business activity. Notify the tax office of the end of the pause on the day preceding the end date of such pause. If the pause is due to an illness, you should submit the notification no later than on the date of resuming your business activity after the pause.
If you apply to CEIDG to suspend your business for longer than 30 days, you do not have to submit a notification on the pause in your business taxed under the tax card system.
Find out how to apply to CEIDG to suspend your business.
How to suspend a civil law partnership
Suspending a business run in the form of a civil law partnership requires several steps:
- first you must notify the office of Statistics Poland (GUS) – the REGON register, no later than 7 days from the suspension date
- then you must notify the tax office, using the NIP-2 form, no later than 7 days from the suspension date
- finally, you must confirm the suspension in CEIDG – you must notify CEIDG only once the formalities with GUS and the tax office are completed and after the actual start date of suspension of your civil law partnership
If you are filing the application to suspend your civil law partnership at the office (CEIDG-1 form), please remember to fill in section 25 and to give the details of your partnership and the suspension date. If you wish to suspend more than one civil law partnership, fill in also the CEIDG-SC form.
Please note! In order for a civil law partnership to be effectively suspended, it must be suspended by all partners. This means that the application submitted to GUS must be signed by all partners, and all partners should notify the tax office and submit the application to CEIDG.
- how to notify GUS of business suspension
- how to notify the tax office of business suspension (NIP-2 form)
- how to apply to CEIDG to suspend your business
Obligations towards employees
You may suspend your business only if you do not have any employees employed based on:
- an employment contract
- nomination, election, appointment
- a cooperative employment contract
Before applying to suspend your business, you must terminate all employment contracts. You do not have to terminate contracts of mandate (umowa zlecenie) or specific task contracts (umowa o dzieło).
You can suspend your business also if your employees are on a maternity leave, a leave on terms of maternity leave, childcare leave or parental leave, and they do not combine their parental leave with work for the employer granting such leave.
As regards any dismissed employees, their insurance coverage with ZUS should be cancelled within 7 days from the end date of the employment relationship.
If you are planning collective redundancies, you must notify the local poviat employment office of the reasons for such collective redundancies.
Obligations towards ZUS
Notifying ZUS of the suspension
If you are suspending a one-person business, you do not need to notify ZUS (Social Insurance Institution). All you need to do is notify CEIDG. Based on the information received from CEIDG, ZUS will draw up relevant forms:
- ZUS ZWPA – to cancel your status of the contribution payer
- ZUS ZWUA – to end insurance coverage of the business operator and of any cooperating persons
- ZUS ZCNA – to end insurance coverage of family members of the insured (the business operator or the cooperating person)
Please note! This does not apply if you are suspending your business in relation to childcare. In this case, your contributions may be paid in full from the State budget. However, in order to use this right, you must apply to ZUS.
Ending insurance coverage of employees
If you have terminated employment contracts with your employees before suspending your business, you must still end their insurance coverage with ZUS.
You must do that within 7 days from the end of the employment relationship, by submitting the ZUS ZWUA form. The end date of insurance coverage required to be given in the form should be the date following the end date of the employment relationship. On the form, give the relevant code to state the reasons for the end of insurance coverage.
You must also end insurance coverage of all family members insured – by submitting the ZUS ZCNA form.
You may send the documents to ZUS electronically, through:
- the Płatnik programme, in the form of an electronic document signed with a qualified electronic signature
- the ePłatnik app, available at PUE, with the use of a qualified electronic signature or your Trusted Profile
Contributions paid to ZUS during the suspension period
During the suspension period you do not pay contributions to ZUS as you are not insured with ZUS.
Before submitting your application to suspend your business, decide on the start date of such suspension period. If you suspend your business during the month, you will need to pay:
- the health insurance contribution for the entire month
- social insurance contributions proportionally to the number of days in which your business was active in the given month – during the suspension period which lasts for a part of the month, the amount of the lowest contribution calculation basis is reduced proportionally, by dividing it by the number of calendar days in the month and by multiplying it by the number of days covered with insurance.
Piotr has a laundry business. On 24 March 2020 he applied to CEIDG to suspend his business. In his application, he gave 20 March 2020 as the start date of the suspension period. He suspended his business for 3 months, until 20 June 2020. Piotr had to pay a full health insurance contribution for March and the next one for June, also in a full amount. Also, he had to pay the social insurance contribution in a proportional amount: for 19 days in March (1-19 March) and for 11 days in June (20-30 June).
The right to healthcare benefits expires 30 days after the end of the period covered with health insurance. Therefore, if you wish to be entitled to healthcare benefits during the suspension period, you should register for voluntary insurance with the National Health Fund (NFZ) (unless you are covered with insurance on a different basis, for instance under an employment contract or a contract of mandate).
You can also register for voluntary retirement pension and disability insurance, by submitting the ZUS ZUA form. Check how to do that in the ZUS Handbook on voluntary retirement pension and disability insurance.
During the suspension period you may not register for voluntary sickness and work accident insurance.
Suspending a business when you are insured with KRUS
If you are insured with KRUS (Agricultural Social Insurance Fund) and you have applied to CEIDG to suspend your business, CEIDG will notify KRUS, the head of the relevant tax office and Statistics Poland (GUS).
You do not need to submit any additional documents to KRUS.
As a farmer conducting business activity and registered with KRUS, you must pay the following contributions:
- in a double amount – for retirement pension and disability insurance
- in a single amount – for other types of insurance: work accident, sickness and maternity insurance
At the moment of suspending or closing your business you will again pay contributions to KRUS in a single amount.
Contributions to KRUS are paid quarterly, therefore it is more beneficial to suspend your business at the end of the quarter and not during it. KRUS will not repay any part of the contribution paid upfront for the entire quarter. After resuming your business, you need to pay contributions for the entire quarter, regardless of whether you have resumed your business mid-quarter or at the end of it.
During the suspension period you do not have to submit:
- a statement on the continuation of your insurance coverage with KRUS
- a certificate from the head of the relevant tax office or a declaration on not having exceeded the limit amount of income tax on revenue from non-agricultural business activity
However, it is worth to submit those (by 31 May) – KRUS departments support such practice. If you do so, then you do not need to submit the certificate from the tax office when resuming your business.
Please note! If you are a farmer (or a household member – a family member of the farmer) running a business but you are insured with ZUS, then when suspending your business you need to inform KRUS about this, together with a certificate from ZUS on the period of your insurance coverage with ZUS. In such an event CEIDG does not forward the information to KRUS.
Suspending business and childcare
If you wish to suspend your business due to childcare, you have the right to be covered with retirement pension and disability insurance. Your contributions will be paid entirely from the State budget, through ZUS.
In order to be entitled to such insurance coverage during the suspension period, you need to have run your business for at least 6 months during the period directly preceding the period of suspension. You may not have any employees.
The condition of at least 6 months of business activity is met if:
- you were covered (on a compulsory or a voluntary basis) with retirement pension and disability insurance on a continuous basis, as a result of running a business, directly before the start date of personal childcare
- you paid contributions for retirement pension and disability insurance for at least 6 months
- any non-payment of contributions was only as a result of receiving benefits under sickness or work accident insurance
- in the period of 6 months preceding the start date of childcare you were covered with social insurance as a person receiving maternity benefits, as a result of running a business
The right to suspend your business and be covered with retirement pension and disability insurance may be exercised at one time or in maximum 5 parts. The right is valid for:
- up to 3 years, however, no longer than until the end of the calendar year in which the child has his/her 6th birthday
- up to 6 years – in the case of children who require personal care due to health reasons confirmed with a disability certificate of a disability degree certificate, however, no longer than by the 18th birthday of the child
Please note! The right to be covered with compulsory retirement pension and disability insurance is granted to one of the parents, provided that the other parent is not covered with retirement pension and disability insurance as a result of childcare or as a person receiving maternity benefits or a benefit in the amount of maternity benefits, or as a person on a parental leave.
The basis for calculating contributions for retirement pension and disability insurance is the amount of 60% of the forecast average monthly salary for the given calendar year (the same as in the case of standard contributions paid by a business operator).
Persons covered with compulsory retirement pension and disability insurance as a result of personal childcare and not covered with compulsory health insurance under a different basis, are covered with compulsory health insurance.
The insurance obligation arises on the start date of the coverage with retirement pension and disability insurance as a result of personal childcare, and ends on the end date of such childcare.
The basis for calculating the contribution is the amount equal to the amount of special childcare benefit granted under legal provisions on family benefits.
Documents to be submitted to ZUS
You need to submit to ZUS a declaration on your intention to be covered with retirement pension and disability insurance (UE-1 declaration), stating:
- your name and surname, PESEL identification number and the number of your identity card or passport
- your residence address
- the start date of personal childcare
- the name and surname of the child and his/her date of birth
- information on the last period of insurance
- information on whether the other parent has or has not used the rights granted as a result of personal childcare
Together with the declaration, the following documents must be submitted in original:
- an abbreviated copy of the child’s birth certificate
- a disability certificate or a disability degree certificate (if such was issued in relation to the child)
You must notify ZUS of any changes in the data included in the declaration within 7 days of the date of such change. Also, you must update the data included in the declaration if the period of business suspension for the purpose of personal childcare changes.
Insurance with KRUS
Legal provisions on social insurance for farmers provide for the possibility of State budget financing of contributions for retirement pension and disability insurance in the period of caring for an own child, a child of a spouse or an adopted child, for:
- a farmer or a household member covered with retirement pension and disability insurance under the Act or upon request
- a farmer and a household member not subject to social insurance of farmers
- a farmer’s family member or household member not meeting the conditions for coverage with social insurance for farmers
Please note! In the case of persons insured with KRUS, conducting a non-agricultural business for at least 6 months before the date of the application for State budget financing of contributions for retirement pension and disability insurance is not required.
Conditions to be met for State budget financing of contributions to KRUS
The right to State budget financing of contributions for retirement pension and disability insurance is granted when the following formal requirements are met:
- in the case of persons covered with retirement pension and disability insurance from KRUS, submitting an application for State budget financing of contributions for retirement pension and disability insurance in relation to personal childcare, and in the case of persons who so far have not been covered with retirement pension and disability insurance from KRUS, submitting an application to be covered with retirement pension and disability insurance and for State budget financing of the relevant contributions, in relation to personal childcare. The application forms can be downloaded from the KRUS website.
- submitting an abbreviated copy of the child’s birth certificate and in the case of a child with disabilities – a disability certificate or a disability degree certificate
- the person performing personal childcare may not be covered with other social insurance and has not been granted the right to social insurance benefits, including any retirement pension and disability benefits
- a farmer or a household member, who at the same time is conducting non-agricultural business activity or cooperating in conducting such business activity, must stop such activity or suspend such business or cooperation for the period of personal childcare (this means that on the start date of State budget financing of such contributions such activity may not be conducted)
- the other parent is not using the right to State budget financing of KRUS contributions in relation to personal childcare, or the right to State budget financing of ZUS contributions under the Act on the social insurance system (for instance, in relation to receiving maternity benefits or a maternity leave)
The contribution financed from the State budget is 10% of the basic retirement pension. Persons who are not covered with social insurance for farmers (that is they do not meet the conditions to be covered with such insurance), in the period of personal childcare are entitled to opt for State budget financing of contributions for retirement pension and disability insurance with ZUS or with KRUS.
What you can do during the suspension period
During the suspension period you may not:
- run a business
- earn current revenues
However, you may perform certain actions in order to secure the source of revenues and to be able to run your business after the suspension period ends.
In particular, during the suspension period you may:
- accept amounts owed to you that arose before the suspension
- receive financial revenues resulting from actions performed before the suspension
- sell fixed assets and equipment
- pay any liabilities that became payable before the suspension
- perform any actions necessary to secure revenues
- secure the sources of revenues
- appoint or dismiss a succession manager
During the suspension period you are required to:
- take part in any administrative, court or tax proceedings, or any proceedings related to your business
- perform obligations resulting from legal provisions
- take part in inspections
- file annual financial statements
- keep your accounting books
- pay any amounts due under public law (such as any real property tax, means of transport tax, environmental charges)
Accounting during the suspension period
If you have kept your accounting books before the suspension, the fact of business suspension does not cancel this requirement. Your obligations will vary, depending on whether you keep simplified accounting records (book of revenues and expenditures), full accounting records or pay a lump-sum tax.
Please note! If you pay your taxes based on the tax card system, you are not required to keep a book of revenues and expenditures or a revenue registry. However, if you benefit from the VAT exemption or you use a cash register, you must keep sale records.
- how to keep simplified accounting records during the suspension period
- how to keep records for the purpose of lump-sum tax during the suspension period
- how to keep full accounting records during the suspension period
Income taxes during the suspension period
If you calculate your tax from business activity under general rules (17% and 32% rate) or you pay a flat rate tax of 19%, you do not make tax advance payments for the period of business suspension.
If you pay lump-sum tax on registered revenues, you are exempted from such lump-sum tax during the period of business suspension.
Please note that the exemption from:
- income tax advance payments
- payment of lump-sum tax on registered revenues
applies to the period when your business activity is suspended. This means that should the obligation to make a tax advance payment or pay a lump-sum tax arise during the suspension period (for instance if you earn a revenue), you would be exempted from it.
However, should the obligation to make a tax advance payment or pay a lump-sum tax on registered revenues arise before the suspension period, you would be still required to make the payment, even if the payment deadline falls during the suspension period.
Marta runs a business – she sells vegan cakes. Her business is taxed under general rules and she makes monthly tax advance payments. She decided to suspend her business, starting on 16 March 2020. On 25 April 2020, that is during the suspension period, Marta sold flour she had been using to bake her cakes. The flour had the expiry date of 30 September 2020 and Marta was not sure whether she would use it before this date as she was not planning to resume business activity at that point. She was able to make the transaction as its purpose was to protect her business from losses. As a result of the suspension, Marta:
- by 20 April 2020 must make a tax advance payment in relation to the income (revenues) earned before the suspension, that is before 16 March 2020
- does not have to make income tax advance payments during the suspension period
- by 30 April 2021 must submit the annual PIT-36 tax return, covering the suspension period as well, including the sale of flour
If you calculate your tax from business activity under the tax card system, you do not pay the tax under the tax card during the suspension period notified to CEIDG or during a pause notified to the head of the tax office. If the suspension period or a pause is different than a full month (for instance it lasts 40 days), you should reduce the tax amount for the given month by 1/30 of the monthly amount due for each day of the suspension or the pause.
Katarzyna notified the tax office of a pause in her business, taxed under the tax card system, lasting from 1 March to 10 April. According to the calculations of the head of the tax office, her monthly tax is PLN 300. She will not pay tax for March, and for April she must pay PLN 200 (20 days x PLN 10). In the event of business suspension, she would calculate the tax due for this period in the same manner.
Annual tax return for the suspension period
Suspending business activity does not cancel your obligation to submit an annual tax return, even if the suspension period covers the entire tax year. The annual tax return must be filed even if you have not earned any income during the year.
The annual tax return must account for all revenues earned during the tax year (including the suspension period) and any costs incurred. The deadline for submitting the annual tax return depends on the manner of taxation:
- PIT-36 (for those who have chosen the tax scale) and PIT-36L (for those who have chosen the flat rate tax) must be filed by 30 April
- PIT-28 (lump-sum tax on registered revenues) must be filed by the end of February
- if you calculate your tax under the tax card system, you do not submit an annual tax return. However, by 31 January you need to file the PIT-16A form, that is a summary of your monthly health insurance contributions that have been paid and deducted from the tax card.
Depreciation during the suspension period
During the suspension period you may not depreciate those assets which are not used as a result of the suspension period.
Those assets are not subject to depreciation starting from the month following the month in which the business activity was suspended. The pause in depreciation lasts until the end of the month in which business activity is resumed.
Józef depreciates his manufacturing machine. He has suspended his business for the period from 1 March until 31 August. He can make the last depreciation deduction for March, and then he may continue to calculate the depreciation deductions starting from September. As a result, the period of depreciation of the machine will be longer by 5 months but the number of depreciation deductions will not change.
Suspending a business and a cash register
If you have suspended your business you do not need to make any additional actions as regards your cash register. You do not need to apply to have the cash register removed from the registry kept by the tax office. You can keep your cash register and start using it once you resume your business activity. You do not need to make any periodical technical inspections provided that you do not keep the sale records in this period.
Please note! During the suspension period notified to CEIDG, if you have not made any sales registered with the cash register, you do not file any daily or monthly reports. This means you do not need to make the so-called “empty” reports.
If during the suspension period you have sold to an individual or a flat-rate farmer any items of your business property or of your fixed assets, you must register such transactions with your cash register and prepare a daily report, and a monthly report as well. In the event of sale to other entities, you must issue an invoice.
Please note that during the suspension period you do not need to replace your old type cash register with a new type. It is important that you do this before the first sale once you resume your business activity.
VAT during the suspension period
JPK VAT statement
During the suspension period you are not required to submit the JPK_V7M and JPK_V7K statements.
The exemption from the obligation to submit those tax statements applies only to full settlement periods, therefore you must submit your statements for any period (a month or a quarter) in which you have conducted business activity, even if it was for one day only.
This means that if you have suspended your business mid-month/quarter, you must submit a JPK_V7M/JPK_V7K statement for this period nevertheless.
Robert runs a cleaning business. He is registered for VAT and every month he submits a monthly JPK_V7M statement. Robert has suspended his business on 30 March 2020 and does not have to submit the tax statements for the period in which his business is suspended (exemption from the obligation to submit tax statements applies to a full settlement period). His last JPK_V7M statement will be for March – to be submitted by 25 April.
There are several exceptions as regards the exemption from the obligation to submit JPK_V7M/JPK_V7K during the suspension period. You DO have to submit the statement if during the suspension period:
- you perform an intra-Community acquisition of goods, you import services or you purchase goods and as a result of such purchases you are a VAT payer
- make an adjustment of the VAT proportion (this applies to taxpayers who calculate their tax under the proportion mechanism and are required to adjust the amount of tax deduction given in the statement for the first settlement period of the next tax year)
- you wish to exercise the right to make a tax deduction, for instance as regards the costs of fixed-term agreements, such as for phone services or renting premises – you need to submit the tax statement to be entitled to tax deduction
- you must correct an earlier tax statement – the exemption from the obligation to submit tax statements does not apply to periods in relation to which you are required to correct any amount of calculated tax
- you perform any action resulting in an obligation to settle tax or in an obligation to submit a tax statement for the period in which you have performed such an action
Robert, who suspended his cleaning business in March 2020, in July 2020 sold a professional vacuum cleaner that he had been using in his business. He was entitled to perform this transaction since a vacuum cleaner that is not in use is losing its worth and is more prone to technical failures, which means losses to the business. As a result of this transaction, which was subject to goods and services tax, Robert had to submit a JPK_V7M statement for July, no later than by 25 August 2020.
If you are registered as an EU VAT payer and you do not make any intra-Community acquisitions of goods during the suspension period, you do not have to submit any VAT-EU returns.
Register of VAT payers
Suspension of business for at least 6 months results in removing the business operator from the register of VAT payers. After the suspension period, the business operator is re-entered in the register without the need to submit an application.
If during the suspension period you are to perform any actions subject to VAT, you are required to notify the head of the relevant tax office, indicating the period in which you are to perform such actions. The notification should be submitted:
- before the start date of the suspension period, or
- before the date of such actions during the suspension period
If you submit such notification, you will not be removed from the register of VAT payers and your VAT payer status will be reinstated for the period indicated in the notification.