Prowadzenie działalności gospodarczej bez obowiązku rejestracji w CEIDG
Do you run a blog, sell graphic designs, or maybe you have small sales online? You should know that if you start doing this on a regular basis, you will have to register your business..
For an activity to qualify as an economic activity, it must also be carried in one's own name, regardless of its outcome, in an orderly and continuous manner, with a view to making a profit.
The basic features of economic activity include
- income target - it is profit oriented (this also applies if you are currently making a loss),
- being organised - your business is organized if e.g. you rent a room to conduct it, you are looking for customers or marketing,
- continuity - means undertaking continuous activity aimed at a specific objective. The focus on continuity and repeatability is important here - business interruptions do not mean its continuity.
Carrying it out in your own name and responsibility for it (i. e. you do not perform it on commission and under the direction of your principal).
The economic activity differs from the activity carried out in person (which does not involve obligations such as those of entrepreneurs). Personal activity (in the light of tax regulations) includes, among others, income from artistic, scientific, trainer, educational and journalistic activities, income earned on the basis of management contracts, managerial contracts or similar agreements, revenues from the provision of services under a contract of mandate or a contract for a specific task, obtained exclusively from entrepreneurs.
Important! There are several definitions of economic activity and entrepreneur in the regulations (e. g. in the Act on Freedom of Activity, the Tax Ordinance, the Personal Income Tax Act). This means that if you do not" fall under the definition of economic activity or entrepreneur in one act, you may be subject to other laws (e. g. tax or insurance laws). An example is the definition of an entrepreneur in insurance legislation. According to them, a shareholder of a registered partnership is subject to the same insurance policy as an "entrepreneur", although he is not an entrepreneur under other regulations (registered partnership is an entrepreneur and not its partners).
The question of whether you should register your activity and settle as an entrepreneur is particularly important in tax matters. Even if you are not conducting economic activity in your opinion, the tax office may disagree. If you are in doubt as to whether you should settle your accounts as a person conducting business, please contact the tax office.
Activity exempted from registration
Conducting business activity (selling goods or offering services) requires registration of business activity in the Central Register and Information on Business (CEIDG) or the National Court Register (KRS). There are, though, certain areas of activity which may be conducted without registration of business activity. These areas include:
- agrotourism activities of farmers,
- production of wine by farmers,
- agricultural retail trade
In Article 3 of the Act of July 2, 2004 on Freedom of Business Activity, the legislator pointed out types of activities to which this Act does not apply. The mentioned catalogue includes among others agrotourism, which involves renting of rooms, serving homemade meals and provision of other services by farmers, related to the stay of tourists in an agricultural holding. A farmer providing such services does not have the obligation to register business activity.
One must remember, that although this activity in the light of the Act on freedom of Business Activity is not subject to registration in CEIDG, according to the Act on Personal Income Tax it is considered as an additional, non-agricultural source of income of a farmer. Therefore, despite the fact that revenues from this activity are not obtained in the course of business, they are subject to taxation in accordance with all the rules laid down as to business.
More on taxation of activity can be found in the section Settlement of taxes
In case of conducting agrotouristic activity on a small scale, Article 21 (1) (43) of the Act on Personal Income Tax provides for the exemption from tax. This privilege applies to "income obtained from renting of guest rooms in residential buildings located on rural areas in an agricultural holding to persons during their leisure stay, and from income obtained from catering these persons, if the number of rooms does not exceed five".
Income obtained from sale or berries, mushrooms as well as products and goods of your own farm is also released from tax. Whereas income obtained from the sale of unprocessed plant and animal products from the agricultural holding (also vegetables, fruits and fish) is not covered by the Act on Personal Income Tax at all. That is why when offering such products to guests of the agricultural holding, the farmer does not pay personal income tax.
In case the farmer does not meet the conditions for release, that is the number of rooms offered for rent, or provides services not only to tourists, he shall be required to pay tax from the obtained income. If there shall be more than 5 rooms for rent, income from agrotourism shall be taxed in full.
Additional services provided by the agricultural holding, such as renting of tourist and sports equipment (bicycles, quads, kayaks, fishing rods), carriage and sleigh rides, organization of kuligs and bonfires, horseback riding lessons etc. are not covered by the tax release for agrotourism, and also it is not an agricultural activity free from personal income tax.
It is possible to tax revenues from such activity on general principles, both accoring to the scale and according to a flat rate. The base of taxation in such an option is income, that is revenue minus deductible expenses. Another option is a lump sum tax on recorded revenue, where expenses are not taken into account and simplified records are maintained. Also a tax card is an option but in this case, statutory conditions must be met, for example the total number of rooms cannot exceed 12.
Settlement of VAT by persons conducting agrotourism farms is done according to regular principles. Here we have chargeable provision of services, which in principle is subject to taxation. Within the meaning of the Act on Goods and Services Tax (VAT), agrotourism is a business activity, whereas the number of rooms is irrelevant. What is important is the value of sales.
If in the previous calendar year it did not exceed PLN 200 000 one may (but doesn't have to) take advantage of the subjective tax release. If it does, there is an obligation to register as an active VAT taxpayer, maintain records of sales, and to settle tax.
Learn more about the principles of agri-tourism services.
Production of wine
In Article 3 of the Act of July 2, 2004 on Freedom of Business Activity, the legislator pointed out types of activities to which this Act does not apply. The mentioned catalogue includes, among others, activity covering production of wine by producers being farmers, who produce less than 100 hectoliters of wine during a marketing year. This means that a farmer producing less than 100 hectoliters of wine during a marketing year does not have to register business activity.
Revenue obtained from production of wine by farmers, the production of which is less than 100 hectoliters, is subject to taxation by personal income tax. According to Article 10 (1) (9) of the Act on Personal Income tax, revenue from other sources is deemed due, even though it has not been physically received, in case of agricultural production activity involving production of wine by producers being farmers, who produce and bottle wine obtained from grapes of their own crops, if they produce less than 100 hectoliters of wine during a tax year.
As for producers taxed by the goods and services tax (VAT), revenue from sales is understood as revenue minus due VAT.
The principle obligations of wine producers are governed by the Act of May 12, 2011 on Production and Bottling of Wine Products, Marketing These Products and the Organization of the Wine Market. An owner of a vineyard planning to conduct production of wine intended for marketing must make an entry in the register of producers and entrepreneurs producing wine from grapes harvested from vineyards located in the territory of the Republic of Poland. It is maintained by the President of the Agricultural Market Agency. An entry is made on the basis of an application from the entity, for each marketing year. The application must be submitted by July 15 of the year preceding the tax year.
More information on the organization of the wine market in Poland can be found on the website of the Agricultural Market Agency.
Farm sales (agricultural retail trade)
Sale of non-industrial processed plant and animal products (with the exception of processed plant and animal products obtained under the so-called special section of agricultural production and products subject to excise duty) is not subject to registration. Provided that:
- the sale is not made for the benefit of legal persons, organisational units without legal personality or natural persons for the purposes of their non-agricultural business activity;
- processing of plant and animal products and their sale is not carried out in the case of employment of persons under employment contracts, mandate contracts, contracts for specific tasks and other similar contracts,
- the products are sold only where they have been manufactured or marketed,
- the quantity of plant or animal products from own-cultivation, rearing or farming used in the manufacture of the product concerned shall represent at least 50% of that product, excluding water.