Tax limits for the year 2024 will be lower than in 2023. As a result, fewer entrepreneurs will be able to benefit from the status of a small taxpayer, quarterly VAT settlement, or avoid the necessity of transitioning to full accounting.
Tax limits are determined in the currency euro in regulations. To convert them to PLN, the appropriate exchange rate of the National Bank of Poland from the first business day of October should be applied. The appropriate rate for the 2024 limits will be the euro rate from October 2, 2023, which was at that time 4.6091 PLN. On October 3, 2022, the first working day in October 2022, the euro exchange rate was higher, 4.8272 PLN, indicating a decrease in tax limits for 2024.
Tax Limits for Lump Sum
Taxpayers who want to continue conducting business activities in 2024 in the form of a lump sum cannot exceed the annual income amount of 2 million euros. Converted at the exchange rate from the first business day of October 2023, this limit will be 9,218,200 PLN.
The income limit for quarterly tax payment by lump-sum taxpayers is 200,000 euros. As a result, they will be able to pay taxes on a quarterly basis if their income in 2023 does not exceed 921,820 PLN. However, it should be remembered that the income limit for a lump sum does not apply to new entrepreneurs. It only applies to those who continue to conduct a business. Moreover, in civil and registered partnerships, the income of all partners is included in the lump-sum limit.
Tax Limits for Small Taxpayers
In income tax regulations, there also exists the concept of a small taxpayer, i.e., one whose income does not exceed 2 million euros, or 9,218,000 PLN annually. They can also pay VAT on a quarterly basis, but only after 12 months from the day of VAT registration.
The status of a small taxpayer in income tax also allows for one-time depreciation of fixed assets. However, reaching the income limit for a small taxpayer does not mean that one-time depreciation can be made of any fixed asset. This principle only applies to those that have been classified in groups 3-6 and 8, excluding passenger cars. Another condition for using one-time depreciation is adherence to the asset value limit, which is 50,000 euros. Due to changes in the euro exchange rate, in PLN, this limit in 2024 will amount to 230,000 PLN.
Limits for 9% CIT Rate
The preferential CIT rate of 9% depends on whether the company complies with two limits:
1. Gross income from the previous year cannot exceed 2 million euros,
2. Net income in the tax year cannot exceed 2 million euros.
Companies whose gross income in 2023 does not exceed 9,218,000 PLN will benefit from the 9% CIT rate in 2024. The net income limit, in contrast, is calculated at the exchange rate from the first business day of the year. Thus, we will learn the second value of the 2024 limit on January 2, 2024.
Tax Limits for Full Accounting
After exceeding an annual income of 2 million euros, taxpayers using simplified accounting must switch to full accounting. This rule applies not only to partners in civil, registered, or partnership companies but also to individuals conducting sole proprietorships. If the company’s income in 2023 does not exceed 9,218,200 PLN, then in 2024 the entrepreneur may still conduct simplified accounting.
Piotr Juszczyk, Chief Tax Advisor at inFakt
