19 % tax on income from the non-agricultural economic activity or from special agricultural production segments is a so-called flat-rate tax.
The nature of the flat-rate tax is that whatever level of income you received from business activities, at all times you pay tax at a rate of 19 %.
If you have not selected during the registration tax the linear method, but in the end you want to settle in this way, change is possible from a new tax year (calendar year). Applications must be submitted to the head of the tax office by 20th January of a given tax year or before the date of first revenue.
The right to opt for this form of taxation have only taxable persons engaged in an economic activity and only in relation to revenues.
Income taxed in this way may not be combined with income from other sources. Flat rate tax cannot be applied, for example, to the income from the contract of employment and pensions, and revenues from the activity performed personally (which are taxed under the general tax rules - tax scale).
If you conduct business activity taxed by a flat rate tax and at the same time receive income from an employment contract, you must submit separate tax return provided for the taxation by the tax scale (PIT-37).
When it is a good idea to choose 19 % PIT
The biggest impact on the choice of taxation by flat rate of 19 % is a high amount of revenue collected, significantly exceeding PLN 85 528 - amount above which income is taxed at a rate of 32 % (second step of the tax scale). According to estimates, the choice of applying a flat tax of 19 % is economically viable with an annual income of more than PLN 100 000. This is due to, among other things, the inability to settle tax jointly with a spouse or child, and obligatory resignation from tax relief.
Restrictions on the use of reliefs
It is very important that, in the case of flat tax you cannot access the majority of reliefs and tax deductions which apply to those taxed according to the tax scale. The tax base can be reduced in a given year only by paid social security contributions and insurance of persons collaborating with him/her, and incurred losses and payments made to Individual Pension Insurance Account (IKZE). The tax itself may be deducted from the compulsory health insurance contributions.
As a lump sum payer you can decide to allocate 1 % of your output tax resulting from the annual return to a selected public benefit organisation.
In linear tax received income is subject to taxation and thus the revenue is reduced by deductible costs.
Record keeping obligations
As in the case of taxation according to the tax scale, you must keep records of revenue and costs by means of the revenue and expense ledger or accounting books (the latter must necessarily be lead by larger companies).
In the course of the year, you have to make advance income tax payments on a monthly or (if you are a small taxable person or a taxable person starting business) quarterly basis. Payments are made to the 20th day of the month following the month/quarter to which the advance tax payment relates to.
Following the end of the tax year you must submit to the tax office the tax return on profits earned (losses incurred), by 30th April of the subsequent year. For tax payers who settle using linear form PIT-36L applies.