Government Proposes 15% Flat Tax Rate Effective 2027
The Polish government is drafting tax amendments that will raise the flat-rate income tax to 15 percent for certain sole traders and specific entities starting January 1, 2027, as part of a wider...
The Polish government is drafting tax amendments that will raise the flat-rate income tax to 15 percent for certain sole traders and specific entities starting January 1, 2027, as part of a wider fiscal reform.
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New Tax Rules for Sole Traders
The Ministry of Finance has prepared a draft amendment to income tax laws that modifies the rules for applying preferential flat-rate taxes. While the draft does not introduce a new tax, it restricts the eligibility for lower rates, forcing some taxpayers to move to a 15 percent bracket.
The changes will primarily affect individuals conducting business activities without hiring employees, as well as specific settlements involving related parties. These provisions are scheduled to take effect on January 1, 2027.
Impact on Business Operations
For example, a sole trader earning 320,000 PLN annually who performs all services independently without staff may see their tax burden increase if their business activity falls under the new classifications. The final liability will depend on the specific nature of the business and compliance with all updated statutory conditions.
Official Rationale and Legislative Scope
The Ministry of Finance justifies the reform as an effort to prevent the misuse of preferential tax regimes and to encourage the employment of staff while sealing the tax system. This proposal is part of the comprehensive UD116 legislative draft, which contains nearly 100 pages of wide-ranging updates to income tax and CIT regulations.
Legislative Status
The project is currently in the legislative process and remains subject to potential changes during parliamentary review. Entrepreneurs are not required to take immediate action, as the government continues to work on the final shape of the regulation.