Choice of method of taxation
Commercial law companies and persons with legal personality – limited liability companies and joint stock companies pay corporate income tax – CIT (corporate income tax law). They pay tax at the same amount regardless of income, size or type of business (19%).
Entrepreneurs who are natural persons, under the provisions of the Personal Income Tax Act (PIT), are also obliged to pay income tax. They have the choice of one of the following forms of taxation:
General principles – on a tax scale of 18% and 32%,
Linear tax – 19%,
Lump sum on registered revenue,
To choose the right form of taxation the taxpayer has time:
Until January 20 of the tax year – in the case of people pursuing business activity,
Until the date of the application for entry in the Central Register and the Information on Economic Activity, in which it selects the form of taxation – in case of starting a business activity,
To commence business, in the case of a tax card or until the date of earning the first income in all other cases – if the form of taxation has not been selected in the application for CEIDG registration.
According to the regulations, the chosen form of taxation should be applied throughout the tax year. In practice, however, there are cases where a change of form of taxation during the year is possible and even necessary. These are situations when a taxpayer under the laws loses the right to account for the form of tax he chooses. When the taxpayer decides to change the form of taxation of operating income, he or she should notify the change by January 20, at the latest, of the new tax year from which the change occurs.
When the entrepreneur chooses the right form of taxation, there is still a question of how to pay tax. This is important because it can significantly affect the financial liquidity of the taxpayer.
And so here are the following ways of paying income tax:
Quarterly (sometimes allows you to postpone the tax payment deadline), or
In simplified form.
We advise on how to choose the best form of taxation for businesses.