Business insights

Polish ryczałt: a EUR 250,000 eligibility limit from 2027? Preparing a change of taxation

Przemysław Szot 29.10.2026

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An entrepreneur whose revenue exceeds the equivalent of EUR 250,000 should prepare an alternative calculation in case entitlement to Poland’s ryczałt regime is lost in 2027. The legislation under consideration reduces the current EUR 2 million limit eightfold. For an ongoing business, the test concerns prior-year revenue, not profit or forecast sales in the new year.

What the proposed reduction from EUR 2 million to EUR 250,000 means

One current condition for continuing Poland’s lump-sum tax on recorded revenue, known as ryczałt, is that prior-year revenue must not exceed EUR 2 million. The bill replaces that amount in Article 6 of the Ryczałt Act with EUR 250,000. It covers the relevant rules for both individual business activity and activity carried on through a qualifying partnership.

The limit is not the only eligibility condition. The type of business and other statutory exclusions also matter. For a partnership, the threshold cannot simply be applied to one partner’s share without examining the rules: the relevant test concerns the revenue of all partners.

This proposed amount is neither a VAT-exemption threshold nor the limit for quarterly ryczałt settlements. Those are separate mechanisms. Combining them in one calculation may give an incorrect picture of the business’s obligations.

The legal basis and currency conversion rule

For an ongoing individual business, the main test is in Article 6(4)(1)(a) of the Ryczałt Act; the corresponding partnership rule is in point (b). Under Article 4(2), euro amounts are converted using the relevant National Bank of Poland rate from the first working day of October of the preceding year. This differs from the rate used to recognise an individual foreign-currency invoice.

In the explanatory memorandum to paper 3147, narrowing ryczałt’s scope forms part of restructuring the tax burden and financing a more favourable PIT scale. Senate resolution 3270 also makes application of the new scale conditional on specified CIT changes and the ryczałt limit taking effect. That explains why the measures are considered together; it does not remove the need to check each entrepreneur’s eligibility separately.

Why 2026 revenue needs to be calculated

If the new limit begins to apply in 2027 as envisaged, an ongoing business’s eligibility would be assessed using revenue earned in 2026. A lower 2027 forecast would not, by itself, erase an excess in the preceding year.

Example. A business earns revenue equivalent to EUR 300,000 in 2026 and forecasts EUR 180,000 for 2027. If the new rules take effect, it would not retain ryczałt for 2027 merely because the next year is expected to be weaker. The test would concern the preceding year. This example assumes correct conversion of the statutory limit and no special provision changing that outcome.

The euro threshold must be converted into PLN according to the statutory exchange-rate rule. Do not use the rate applied to invoices or today’s commercial bank rate. Approximate amounts can support an initial review, but choosing tax treatment requires the exact PLN threshold for the relevant year.

The EUR 250,000 limit is separate from EUR 300,000 and a 17% rate

Reports on the bill mention two different amounts. EUR 250,000 concerns entitlement to ryczałt based on the preceding year’s revenue. The Sejm’s new 17% provision concerned the excess of specified revenue above EUR 300,000 earned in the current year.

The Senate proposed removing the new 17% rate above EUR 300,000. It did not remove the reduction of the eligibility limit to EUR 250,000. Removing one proposal therefore does not preserve the current EUR 2 million limit. The Sejm must still consider the Senate’s amendments.

Comparing progressive PIT and flat income tax

If ryczałt may cease to be available, model alternative taxation before the election deadline. Start with actual taxable income: revenue less expenses qualifying as deductible tax costs. The ryczałt percentage alone does not provide a comparable answer.

Information needed to compare forms of taxation
Area	What to establish
Revenue and costs	Sales forecast, deductible costs, depreciation and one-off expenses.
The taxpayer and family	Other income, joint-filing conditions, reliefs and restrictions.
Contributions and cash flow	Health and social contributions, advance-tax payments and other payment dates.
Accounting	Required records, cost evidence and changes to document handling.

Progressive taxation and flat income tax may be available under different conditions, with outcomes depending on the individual’s circumstances. The same legislative package also changes the PIT scale, whose final form is still under consideration. Do not compare the proposed new limit with an arbitrary or outdated set of other assumptions.

Steps before making a 2027 decision

Reconcile 2026 revenue with the records, including adjustments and transactions around year-end.
Check whether the limit applies to an individual business, a partnership or several forms of activity.
Prepare a cost schedule and a 2027 forecast.
Compare available tax treatments together with health contributions, reliefs and other income.
Identify the notification deadlines and required changes to record-keeping.

Do not base the plan on artificially dividing a single business among several entities. Establish the actual business model and the legal consequences of any reorganisation first. Staying within the proposed limit does not, by itself, explain the costs and risks of that operation.

Partnership limits, re-election and services to a former employer

Sole business and civil partnership: are revenues combined for the revenue-tax limit?

The ruling of 27 August 2026, 0112-KDWL.4011.97.2026.2.DK, concerned a planned property-development civil partnership; one future partner already ran a sole business. KIS accepted separate revenue-limit tests for sole and partnership activity, subject to other conditions. Within that partnership, however, Article 6(4)(1)(b) aggregates partners’ revenue from that activity. Article 12(5)’s proportional allocation determines an individual’s tax without splitting the partnership limit. The ruling does not approve artificial fragmentation or validate the proposed future threshold.

There are two tests: the sole business’s own eligibility and the partnership business’s eligibility. The latter uses the whole partnership’s revenue. Allocation to individual partners comes later for taxation. A partner’s half share therefore does not halve partnership revenue when testing its limit.

Returning to revenue tax after exceeding the limit: can a PPE transfer evidence the election?

In the ruling of 1 April 2025, 0115-KDIT3.4011.207.2025.1.RS, the taxpayer used ordinary taxation for 2020 after exceeding the then limit and sought a return to ryczałt from 2021. KIS accepted the specified timely, unambiguous PPE transfers as an election. It also explained that the present EUR 2 million test concerns the previous year: exceeding it does not itself immediately remove ryczałt during the year of excess. Re-election must satisfy Article 9. In practice file a clear declaration within the applicable deadline rather than relying on litigation over transfer wording.

The taxpayer had moved to the progressive scale after losing eligibility, so returning required a new election. KIS examined what the timely transfers expressed. A review should therefore reconstruct the filing history and first payment, rather than rely only on the return submitted after year-end.

A specialist doctor serving the former employer: is revenue tax available after residency?

In the ruling of 2 June 2026, 0112-KDIL2-2.4011.505.2026.2.MC, KIS accepted ryczałt for a medical specialist contracting with the hospital where he had been a resident. The facts described different tasks, autonomy and responsibility, replacing supervised training work. This is not an exemption for every former-employer contract. Article 8(2) concerns the listed receipts corresponding to employment duties in the current or previous year. Its effect can begin on the day the excluded receipt arises, rather than next year as with the revenue threshold alone. A changed job title without changed duties is insufficient.

The described change was from supervised training to independent specialist duties. Comparing responsibilities, supervision and accountability explained why the later services differed from employment. Continued work for the same hospital was therefore only the starting point of the assessment, rather than the complete answer.

Revenue corrections and tax elections: where do disputes arise?

The final NSA judgment of 29 April 2026, II FSK 1035/23, concerned an attempt to invalidate a final assessment after a later correction of 2014 revenue. Exceeding the then threshold affected eligibility in 2015; the taxpayer relied on a subsequent corrective invoice. The NSA dismissed the appeal and stressed that extraordinary invalidity proceedings under Tax Ordinance Article 247 do not replace an ordinary appeal and full reconsideration of the facts. The case applied old law and the old EUR 150,000 threshold, not the proposed EUR 250,000 limit for 2027. It does not prohibit all legitimate corrections. It demonstrates the need for correct reporting and timely action before an assessment becomes final.

In the final NSA judgment of 22 February 2024, II FSK 710/21, concerning flat income tax, a timely unambiguous transfer could express the tax election. This informs the PPE ruling; it neither raises the threshold nor guarantees every payment’s effectiveness. After losing ryczałt, assess the next regime’s eligibility and election deadline separately.

The final NSA judgment of 15 October 2025, II FSK 685/25, illustrates the distinction between the rate and eligibility. The described system-architecture services were software-related and subject to 12% despite no personal coding. Actual services determined the outcome. Staying below the revenue limit does not allow free choice between 8.5%, 12% and 15%.

Numerical models and the Estonian-CIT alternative

Our threshold model uses a hypothetical exchange rate. For illustration only, assume PLN 4.20/EUR; this is not verification of the NBP rate applicable to 2027. The proposed EUR 250,000 becomes PLN 1,050,000; the present EUR 2 million becomes PLN 8,400,000. Prior-year revenue of PLN 1,100,000 satisfies the latter but exceeds the former. An actual decision needs the correct rate and enacted law.

If a civil partnership earns PLN 1,600,000 and two partners each hold 50%, their individual PLN 800,000 shares do not preserve eligibility under the model’s PLN 1,050,000 threshold. The partnership test uses the full PLN 1,600,000. Separate sole-business and partnership tests do not change this rule.

Tax-only model: PLN 1.1 million revenue, different costs
Item	PLN 100,000 costs	PLN 400,000 costs
Income before deductions	PLN 1,000,000	PLN 700,000
19% flat PIT before deductions	PLN 190,000	PLN 133,000
12% ryczałt, only if legally available	PLN 132,000	PLN 132,000

At the same revenue, the flat-PIT difference against modelled 12% is PLN 58,000 or PLN 1,000. If eligibility is lost, the lower ryczałt figure is unavailable. Assume genuinely 12%-rated services and no contributions, reliefs, losses or other income; this is not a final 2027 computation. Calculate progressive taxation separately under the eventual law, including family and health-insurance effects.

For substantial reinvestment, also examine an Estonian-CIT company, discussed in our separate analysis of eligibility and proposed 2027 changes. This corporate regime differs from sole-business ryczałt: it needs an eligible company, ownership, revenue mix, employment and absence of statutory exclusions. Retaining profits may defer distribution tax, but hidden profits and other events can be taxable earlier. Include company costs, withdrawal methods, owners’ PIT and possible transformation effects. Comparing 12% of turnover with a nominal 10% corporate rate is insufficient.

Questions from business owners

Is the EUR 250,000 limit already in force?

Not at the date of this article. It forms part of legislation under parliamentary consideration. Decisions should use the rules ultimately promulgated.

Are all business costs deducted for the limit test?

The test concerns revenue determined under the applicable rules, not income after costs. Costs are particularly relevant when comparing alternative tax treatments.

Does the Senate’s removal of 17% preserve the EUR 2 million limit?

No. Removing a new rate above EUR 300,000 and reducing the eligibility limit to EUR 250,000 concern separate mechanisms.

TLP can compare tax treatments using your business data, including annual tax and the cash required for advances, contributions and the transition.

Let’s discuss your situation

Briefly describe your business situation and the question you would like to resolve. We will agree the scope of the analysis and the documents needed in our reply.

Starting points for our discussion

Reconcile 2026 revenue with the records, including adjustments and transactions around year-end.
Check whether the limit applies to an individual business, a partnership or several forms of activity.

Send us a message

We will agree the scope and order of the next steps. The assessment depends on the facts, documents and Polish provisions applicable to your situation.

Sources and scope

This article concerns Polish law and documents available on 31 October 2026. The example is hypothetical. Actual amounts and consequences depend on the relevant documents and transitional provisions.