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Paying Tax For The Self-Employed In Poland (Yet more Questions...)


ianaus 8 | 20  
28 Feb 2009 /  #1
Hey guys,

Okay, yet another question....

I work as a 3d freelance designer creating various things for tv commercials etc. I will be coming to Poland from Australia very soon.

I wanted to know about paying tax for the self-employed. I work from my home, and when in other countries I normally just fill out a tax self-assessment once a year, and then pay the appropriate tax and/or NI contributions etc. So I need to know the following:

a. Is it a similar process in Poland?
b. Do I need to apply for a tax file number or something like that when I first arrive?
c. Do I have to register my business with a Polish government body? If so, how and with who do I do that?
d. What is the taxable percentage on my gross income?
e. Is there a system where you do not pay tax on the first amount? (for example when I lived in England I think it was something like the first £4500 was tax free, then the next £2000 was something like 10% tax, and then anything above that was taxable at 22%. However I can not remember the exact figures).

f. Also, what about paying your ZUS (which I assume is something like NI in the UK) - how do I pay that as a self-employed worker?

Sorry for all the questions, but most people I have asked so far do not know the answers.

Thank you in advance,

Ian
Harry  
5 Mar 2009 /  #2
paiz.gov.pl/index/?id=866d90e0921ac7b024b47d672445a086

a. Is it a similar process in Poland?

Cheers for that, best laugh I've had all day! You pay ZUS (social security) monthly, tax monthly or quarterly and VAT monthly or quarterly. Then you do an annual return and pay up or get a rebate as appropriate. You will need an accountant.

b. Do I need to apply for a tax file number or something like that when I first arrive?

Yes. You need a NIP number and a PESEL number.

c. Do I have to register my business with a Polish government body? If so, how and with who do I do that?

First you need permission to be self-employed. Details here paiz.gov.pl/index/?id=866d90e0921ac7b024b47d672445a086
Then you go to the GUS (national statistics office) and register there to get your REGON number. Then you go to ZUS and register there. Then you go to the tax office and register there and then again for VAT (different office). Then you go to a stamp shop and have your company stamp made. Then you go to a bank and open a business bank account. Simples.

d. What is the taxable percentage on my gross income?

19% less your business expenses.

e. Is there a system where you do not pay tax on the first amount? (for example when I lived in England I think it was something like the first £4500 was tax free, then the next £2000 was something like 10% tax, and then anything above that was taxable at 22%. However I can not remember the exact figures).

You can have stepped rates as a self-employed person but if you earn more than about 50,000zl per year, you don't want them: you want the flat 19%

f. Also, what about paying your ZUS (which I assume is something like NI in the UK) - how do I pay that as a self-employed worker?

Your accountant will tell you how much you need to pay to each of the three accounts and then you make transfers. You could try doing it without an accountant but good luck to you: you'll need it!
vipservice - | 16  
8 Apr 2009 /  #3
First of all -you are an Australian citizen ?
If yes you cannot be self employed.
You can establish a branch office or an LTD company in Poland.
You will definitely need an accountant.
As far as taxes post -sad but true :(
If you are an Eu citizen you can be selemployed, you'll have to pay 19% income tax, social insurance tax. Vat is included in the invoice you will issue. So it paid by the client and then you will return to the Tax office the difference of VAT between issued and received invoices (i.e. for office rental, gas if you have a truck).

I can suggest you another also legal way.

vip-service@vip-service.com.pl
Seanus 15 | 19,706  
8 Apr 2009 /  #4
On the first point, Harry is spot on. Be sure to get yourself hooked up with an accountant, seriously. Oh, vipservice is right too.

NIP is your tax number and PESEL is particular to you, only you can use it. An extended form of ID really.

Harry outlined the process well. Remember to go to the Regional Office, the Wojewódstwo. In Silesia, it's in Katowice but I'm not sure about elsewhere.

Yeah, ask your accountant about podatek liniowej (steps as Harry called them). It's technical stuff.

Also, be sure to clarify the matter of status. My school once gave me a VAT invoice faktura VAT) but I can only use bills (rachunki). Nie jestem VATowcą (not registered to use VAT invoices).

If you have any further questions, please don't hesitate to ask. Harry knows his stuff in this regard.
delphiandomine 85 | 18,254  
8 Apr 2009 /  #5
How much are you paying for an accountant Seanus?
Seanus 15 | 19,706  
8 Apr 2009 /  #6
Too much, LOL. I've heard people bandy about the figure of 50PLN per month but that's down in shady territory. I pay 150PLN plus 33PLN VAT so 183zł every month.

I'd be lost without him and it's peace of mind. I can sometimes get close with my own calculations but voodoo economics holds sway in Poland and being 1 groszy out can attract the scorn of the tax authorities.
vndunne 43 | 279  
8 Apr 2009 /  #7
Hi Seamus, do you mind me asking you where you are based? My accountant is fleecing me.

Just an additional point to Harry's excellent summary of the process...(it brought back so many memories of going through the process). As a self employed individaul, you get to pay a reduced level of ZUS for the first 2 years, (i think that is the time frame). After which, i think you have to pay about 800 pln a month. An accountant should tell you what you need to pay.

IANAUS - By the way, where are you going to be based? If in Wroclaw, i can give you the name of my interpreter who helped me set up my business ie. brought me around to all the offices.
Seanus 15 | 19,706  
8 Apr 2009 /  #8
I am based in Gliwice in the Upper Silesia region of Poland.
delphiandomine 85 | 18,254  
12 Apr 2009 /  #9
Is it just me, or is there something very illogical about ZUS going from 300 (or 330PLN) to 800PLN after two years? Wouldn't it make much more sense to simply have it as a proportion of your income...?
benszymanski 8 | 465  
12 Apr 2009 /  #10
ZUS going from 300 (or 330PLN) to 800PLN after two years?

It's just because there is a discount on ZUS for the first two years to try and encourage people to open up small businesses.
Seanus 15 | 19,706  
25 Apr 2009 /  #11
True, benszymanski, but it's very unforgiving. What if things go wrong and your income drastically drops through no wrongdoing of your own? Then delphi has a super point.
benszymanski 8 | 465  
27 Apr 2009 /  #12
Not sure I follow your argument. ZUS costs 800 a month, so factor that in to your business plan. Then be happy that you have a discount for the first 2 years. Personally I don't see why ZUS should be based on income as it is in the UK because it is an insurance payment that costs the same for everybody (if you presume that everyone has the same chance of getting ill).
Harry  
27 Apr 2009 /  #13
First of all -you are an Australian citizen ?
If yes you cannot be self employed.
You can establish a branch office or an LTD company in Poland.
You will definitely need an accountant.
As far as taxes post -sad but true :(
If you are an Eu citizen you can be selemployed

This is not true. I personally know Australian citizens who are self-employed in Poland. The EU thing is a red herring: what matters is whether a Pole can be self-employed in a country. For example Poles can legally be self-employed in the USA and therefore Yanks can legally set themselves up as one-person companies in Poland.

However as this is Poland you may face certain interpretation issues at the local offices. I know of one case where an American had to resort to writing to the Polish embassy in the US to get them to confirm that Poles can be self-employed in the USA before the office monkeys in prvincial Poland would let him start his own one-person company.
delphiandomine 85 | 18,254  
28 Apr 2009 /  #14
Not sure I follow your argument. ZUS costs 800 a month, so factor that in to your business plan. Then be happy that you have a discount for the first 2 years. Personally I don't see why ZUS should be based on income as it is in the UK because it is an insurance payment that costs the same for everybody (if you presume that everyone has the same chance of getting ill).

The problem as I see it is that there doesn't seem to be any allowance built in for the fact that you could easily be struck down with something, be unable to work and yet struggle to claim disability payments here. Without those disability payments, no ZUS - and thus no health care.

Look at the UK amounts - 2.40 a week, plus 8% over 5,715 a year. That's much more realistic - even if they dropped the limit to 12% of everything to adjust for Polish realities, it would be far more sensible. How can it be remotely sensible to have rich and poor paying the same insurance? No wonder ZUS is in such a mess with such a system.

A fixed payment for health insurance is fine - I have no issue with this. But the pension aspect of ZUS? There's just no excuse for this not to be based on a percentage of income rather than percentage. Seeing as the state pension here is variable dependent on contributions anyway, why isn't it so for the self employed?

The fixed contribution just isn't friendly to the small business owner.
benszymanski 8 | 465  
28 Apr 2009 /  #15
Look at the UK amounts - 2.40 a week, plus 8% over 5,715 a yea

If you are running a Ltd company in the UK like I was, I was paying roughly 10% for employee's NI and 10% for employer's NI. Basically 20%.

Yes you are right in that if you suddenly lost your income you are still paying a lot.

Regarding these benefits anyway - I value them as worthless. I certainly won't be relying on the state to pay my pension or give me disability benefit because it's a pittance.

And when your two year discount period is up you could always close your company and open it up in someone else's name. I understand that after 5 years you can re-open your Polish company and get another 2 year discount period.
vipservice - | 16  
15 May 2009 /  #16
This is not true. I personally know Australian citizens who are self-employed in Poland.

Self-employed legally bearing Australian citizenship ?
I really doubt it, only Eu citizens can.
There are exceptions to this rule.
Maybe they have an LTD company here and they employ Polish workers than I can agree.
If you knwo sth please let me know how they do it.

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