Tax changes from 2025 – Are you prepared?

The most discussed change is the introduction of cash PIT, which took effect on January 1, 2025. However, this is just one of the significant changes awaiting entrepreneurs this year. Also noteworthy are issues such as changes to the payment of health contributions and those related to Real Estate tax, CIT JPK – and more. So read on to find out what tax changes come into effect in 2025.

Cash PIT – decide by 20 February 2025

From 1 January 2025, entrepreneurs gain the option to settle PIT on a cash basis. Cash PIT is the option to pay income tax at the time of actual receipt of payment for goods or services, rather than at the time of their issue/performance or on the date of the invoice.

In relation to cash PIT:

• the tax liability for cash-based PIT arises when the client has already paid the invoice,
• purchase invoices (cost invoices) are recognised as tax deductible when they are paid, not when they are received.

Who can opt for cash-based PIT?

Cash PIT is intended for entrepreneurs who:

• run a sole proprietorship (JDG) independently,
• operate a JDG taxed in accordance with the tax scale, flat tax, IP BOX or lump sum on registered income,
• in the year preceding the new tax year, achieved revenues of no more than PLN 1,000,000,
• do not keep books of account,
• will submit a written declaration on the choice of cash PIT to the competent head of the tax office.

And what is extremely important:

• the choice of the cash method is voluntary,
• the statement on the choice of cash PIT must be submitted by 20 February 2025,
• if the entrepreneur started his/her business activity during the tax year, he/she may file a statement on the choice of cash-based PIT until the 20th day of the month following the start of the activity,
• if the entrepreneur started his/her business in December, he/she can make the declaration until the end of the tax year (by the end of December),
• the choice of cash PIT is valid for the following years, unless the entrepreneur decides to change to another cash method (time to change: until 20 February of the respective tax year).

Health contribution in 2025, i.e. changes not only in taxes

Another important piece of information for entrepreneurs are the changes in the payment of health contribution resulting from the Act of 6 December 2024 amending the Act on health care services financed from public funds. From 1 January 2025, such changes to the rules for determining the health contribution apply as:

1.Reduction of the amount of the minimum assessment basis of the health insurance premium paid by entrepreneurs taxed on general principles (scale or flat tax) – in the case of such entrepreneurs:

• • the minimum health contribution assessment basis is 75 per cent of the minimum salary in force on the first day of the contribution year,
  • the minimum health contribution is 9 per cent of the 75 per cent of the minimum wage valid on the first day of the contribution year or 4.9 per cent of income – whereby the value of the entrepreneur’s contribution may not be lower than 9 per cent of the minimum wage in force.

This means that the lowest health contribution is reduced by 25 per cent and amounts to PLN 314.96 per month.

2.Exclusion of revenues and costs related to the sale of fixed assets from the contribution base – the entrepreneur may decide whether or not to include them in the contribution base, so this is a voluntary option. It applies to entrepreneurs taxed in accordance with the tax scale, flat tax or lump-sum tax on registered income.

Higher other Social Insurance Institution contributions for entrepreneurs

The other side of the coin of the changes to Social Insurance Institution contributions in 2025 is higher social insurance contributions. The basis for the assessment of contributions is 60 per cent of the projected average monthly salary in 2025 (PLN 8673), i.e. PLN 5,230.80.

The social contributions in 2025 with the so-called large Social Insurance Institution are thus:

• pension contribution (19.52 per cent) – PLN 1015.78,
• disability contribution (8 per cent) – PLN 416.30,
• sickness contribution (2.45 per cent) – PLN 127.49,
• accident contribution (1.67 per cent) – PLN 86.90,
• Labour Fund contribution (2.45 per cent) – PLN 127.49.

i.e. in total: PLN 1773.96. Additionally, the health contribution depending on the form of taxation chosen by the entrepreneur should be taken into account.

Lump sum 2025: changes in tax limits

As of 1 January 2025, new tax limits apply for entrepreneurs wishing to settle their business in the form of a registered lump sum. This form of taxation may be granted if, in the previous tax year:

• the entrepreneur’s revenue from sole proprietorship does not exceed EUR 2 million – i.e. PLN 8,569,200 (conversion is made according to the average exchange rate of the euro announced by the National Bank of Poland on the first working day of October of the previous tax year),
• the entrepreneur obtained revenues exclusively from activities carried out in the form of a partnership, provided that the total revenue of the partners did not exceed EUR 2 million, i.e. PLN 8,569,200.

Real estate tax changes in 2025

On 1 January 2025, changes regarding real estate tax also came into force. Namely, in the Act of 12 January 1991 on local taxes and charges , such terms were defined as:

• building,
• building object,
• construction works,
• permanent connection of an object to the ground.

This means that an entrepreneur will no longer have to look to the Construction Law to determine what type of real estate is being referred to.

Important information regarding the changes to Real Estate Tax in 2025.

1.Important for sole traders:

If a sole trader considers that the introduction of the definition of the above-mentioned objects affects the way he pays Real Estate Tax, he can file an update of the information on real estate and construction objects (IN-1) by 14 January 2025.

As long as he completes the formalities by this deadline, the entrepreneur can count on the office determining the new amount of real estate tax for 2025.

2.Important for entrepreneurs conducting business in the form of a company:

In turn, an entrepreneur conducting business in the form of:

• a company with legal personality,
• an organisational unit or
• a company without legal personality,

is required to submit a declaration for Real Estate Tax (DN-1) for 2025 by 31 January 2025. The declaration must take into account:

• changes resulting from the new definitions of building and structure,
• changes effective as of 1 January 2025.

3.Important for all entrepreneurs filing the real estate tax return (DN-1):

Due to the above changes and in fact the short interval between their introduction and the deadline for filing the Real Estate tax return for 2025 , a longer deadline for filing the DN-1 return can be used: until 31 March 2025 instead of 31 January 2025.

Importantly:

• by 31 January 2025, a notice must be filed to use the extended deadline,
• the real estate tax instalments for 2024 must be calculated and paid in January, February and March 2025,
• the entrepreneur will pay real estate taxes in accordance with the DN-1 declaration from April 2025,
• if the paid instalments for January, February and March 2025 are too low, the entrepreneur will have to make up the difference according to the tax amount for 2025 – by 31 March 2025.

Key new definitions: building and structure

Entrepreneurs should pay particular attention to the new definitions of building and structure:

• A building is a structure erected as a result of construction works, together with installations ensuring its use for its intended purpose, permanently connected to the ground, separated from the space by means of building partitions and which has foundations and a roof, excluding a structure in which are or may be accumulated:
  1. loose materials,
  2. materials in pieces, or
  3. materials in liquid or gaseous form,

of which the basic technical parameter determining its purpose is its volume.

• A building is:
  1. a facility that is not a building, listed in the new Schedule 4 to the Local Taxes and Fees Act, together with installations ensuring that it can be used for its intended purpose
  2. wind power plant, nuclear power plant and photovoltaic power plant, biogas plant, agricultural biogas plant, energy storage facility, boiler, industrial furnace, cableway, ski lift and ski jump, in the part not being a building – only as regards their constructional parts
  3. building facility – connection and installation equipment, including for the treatment or collection of waste water and other technical equipment directly linked to a building or facility as referred to in point a and necessary for their use for the intended purpose
  4. atechnical installation other than those referred to in items a to c, only as regards the building parts thereof
  5. the foundations of machinery and technical installations, as technically separate parts of the items making up a useful whole

– erected as a result of construction work, also in the event that they are part of a structure not listed in the Act.

The tax rate on a structure is 2 per cent. of its value.

CIT JPK: new reporting obligation

Further changes, which came into force on 1 January 2025, apply to the largest corporate income tax payers, i.e. those with revenues of more than 50 million euros. Such entities have been obliged to:

• keep their accounting books exclusively in electronic form,
• supplement their accounting books with new data (in connection with which it may be necessary to update/rebuild their accounting systems) – such as:
  • the number of the proof based on which the tangible or intangible asset was accepted for use,
  • the type of evidence for the acquisition, creation or deletion of the tangible or intangible asset from the records,
  • the date of their acquisition, construction, acceptance for use or deletion from the records,
  • the inventory number issued by the entity,
• sending e-books to the tax office in the form of a JPK_CIT file – after the end of the tax year, within the deadline for filing the CIT-8 return, i.e. for 2025: by 31 March 2026,

The above obligations will also apply from:

• 1 January 2026 – other CIT taxpayers sending JPK_VAT,
• 1 January 2027 – all other CIT taxpayers.

VAT changes, 2025: VAT exemption in member states for small companies

Further tax changes in 2025 are relevant for the smallest entrepreneurs – and those operating not only in their own country, but also in other EU member states. According to the changes:

• foreign companies (based in an EU member state) can obtain VAT exemption in Poland,
• Polish entrepreneurs operating in other EU member states may be exempt from VAT under the conditions stipulated in a given country.

These exemptions are provided for entrepreneurs

• whose annual turnover in all EU member states does not exceed EUR 100,000 – in the previous and current tax year,
• whose sales in an EU member state do not exceed the VAT exemption limit applicable in a given country – in Poland: PLN 200 000,
• who register for the exemption in the country where their company has its registered office – in Poland: to the Second Tax Office Warszawa-Śródmieście. Quarterly turnover reports must be submitted in all EU Member States in which they operate to the Poland tax office with jurisdiction over the address of the company’s registered office.

Tax changes 2025: excise duty

Entrepreneurs must also bear in mind the new excise duty for 2025. From 1 January 2025, the excise duty on tobacco products, e-cigarette liquid and novelty products has increased:

• new excise duty on cigarettes, 2025. – PLN 345/1000 units, an increase of 25 per cent,
• new excise duty on cigars and cigarillos, 2025. – PLN 655/kg, increase by 25 per cent, new excise duty on cigars and cigarillos, 2025
• new excise duty rate for smoking tobacco, 2025. – PLN 260.14/kg, an increase of 38 per cent,
• new excise rate for novelty products, 2025. – PLN 565.52/kg, an increase of 50 per cent,
• new excise duty rate for e-cigarette liquid, 2025. – PLN 0.96/ml, increase of 75 per cent.

Global minimum tax, changes in 2025

From 1 January 2025, a directive also comes into force ensuring a global minimum tax level for multinational groups and large national groups in the European Union – at 15 per cent. The new rules apply to:

• multinational and national groups – operating in Poland, which in at least 2 of the 4 tax years preceding the tax year in question showed revenues of at least EUR 750 million in the group’s consolidated accounts.

The legislation provides for 3 types of global minimum tax (colloquially: compensatory tax):

• National top-up tax – on the income of domestic, low-taxed component units. This type of tax takes precedence over the other equalisation tax rules.
• Global top-up tax – levied on the parent of a group, which must pay top-up tax on the income of its low-taxed constituent units.
• Compensatory tax on under-taxed profits – applies when a group parent operates in a low-tax jurisdiction that does not have a global compensatory tax. Group component units from other jurisdictions are then liable to pay tax on low-taxed units.

Get ready for 2025!

Do you have questions about the changes to the tax legislation for 2025? Contact our law firm and be assured that your company is ready for the new regulations.