19% Flat Tax for Self-Employed – Poland

Pay 19% tax on total business income. No progressive brackets - same rate regardless if you earn PLN 50,000 or PLN 1,000,000. Simpler than calculating 12%/32% brackets. No tax-free allowance applies (trade-off for simplicity).

Cannot deduct business costs. Your revenue IS your taxable income. Buy computer for PLN 5,000? Can't deduct it. Rent office? Can't deduct it. This is the catch - good if costs are low, bad if costs are high. Works best for service businesses with minimal expenses.

Huge benefit: income from copyright (prawa autorskie) gets 50% tax reduction. Pay only 9.5% effective tax. Includes: software development, graphic design, writing, architecture, research. Most IT contracts structured as copyright work. Main reason IT contractors choose flat tax.

Can use flat tax if annual revenue under PLN 2 million (approximately €465,000). Most freelancers and small businesses qualify. If exceed limit, must switch to progressive system from next year. Limit quite generous.

Can't use flat tax if: providing services to former employer within 3 years of leaving, operating retail/restaurant with multiple outlets, specific trades like doctors/dentists in some structures. Check if your activity qualifies before choosing.

Must decide by January whether using flat tax or progressive system. Can't switch during year. Choose wisely based on expected income and costs. Can change decision next year if circumstances change.

Choose flat tax when: business costs under 20% of revenue, significant copyright income eligible for 50% reduction, simple structure, don't want bookkeeping complexity. Perfect for: IT contractors, consultants, designers, writers earning PLN 10,000-30,000/month.

Choose progressive when: high business costs (over 30% of revenue), want to deduct actual expenses, income under PLN 120,000 (benefit from 12% rate + tax-free allowance), starting out (lower income). Better for: trading businesses, shops, businesses with inventory/equipment.

Flat tax: PLN 15,000 x 19% = PLN 2,850/month tax (or PLN 1,425 if copyright). Progressive with 20% costs: (PLN 15,000 - PLN 3,000 costs - PLN 2,500 tax-free) x 12% = PLN 1,140. Plus health contribution for both. Run calculations for your situation.