If you’re making your own soap and selling it online, running a blog, or doing web design and want to enter the Polish market, you might wonder if you can operate without registering a business. This article discusses unregistered activities in Poland and other cases when companies are not required to register.
- Can You Run a Business in Poland Without Registering a Company?
- Advantages of Running an Unregistered Business in Poland:
- Obligations in Unregistered Business Activities:
- How to Account for Income from Business Activities?
- Unregistered Activities in Poland and Contract Work:
- Invoices for Unregistered Activities in Poland:
- Regulation of Income and Expenses from Unregistered Activities in Poland
- Unregistered Business and VAT
- Business Activity and Cash Register
- Types of Activities in Poland That Do Not Require Registration
- Agritourism
- Wine Production
- Retail Trade in Agricultural Products
Can You Run a Business in Poland Without Registering a Company?
Unregistered activity in Poland refers to minor profitable work by individuals that does not qualify as entrepreneurship and does not require company registration. You can engage in such activities if:
- You are a physical person (individual).
- Your profit from the activity is less than 50% of the minimum wage in any given month (in 2020, the minimum wage is 2600 PLN, so 50% is 1300 PLN).
- You are not part of a partnership or a board member.
- You are not engaged in activities that require permits or concessions.
- You have not been involved in entrepreneurship for the past 60 months.
Advantages of Running an Unregistered Business in Poland:
- No need to notify the business register, tax authorities, or the Central Statistical Office — no need for NIP and REGON numbers.
- No obligation to contribute to social or health insurance for non-agricultural businesses (with a contract for services or employment, the contractor is insured).
- Exemption from VAT — you are eligible for personal VAT exemption.
- Simplified sales record-keeping.
Obligations in Unregistered Business Activities:
Even if you don’t register your business, you still have some obligations:
- You must maintain simplified sales records.
- You must report your income from unregistered activities in the annual PIT-36 report (after expenses).
- You must respect consumer rights, including the right to return products within 14 days of the agreement.
- You are required to issue invoices or receipts if requested by a customer.
How to Account for Income from Business Activities?
The key factor in running an unregistered business is ensuring that your monthly income does not exceed 50% of the minimum wage.
- The income is based on the sale amount, even if the payment has not been received yet (for example, when you issue an invoice but the buyer hasn’t paid yet).
- Your revenue does not include returned goods, discounts, or promotions. The profit is determined by the sales data.
It’s important to note that if your monthly income exceeds this limit, you must register your business at CEIDG within 7 days.
Unregistered Activities in Poland and Contract Work:
If you are offering services under an Umowa o dzieło or Umowa zlecenia (types of contracts), you are insured as a contractor. The person you enter the contract with (the employer) pays your insurance contributions to ZUS.
There are exemptions — students under 26 are not required to have insurance and the employer is not obligated to pay contributions to ZUS.
Thus, for students, it can be a good time to start in entrepreneurship.
Invoices for Unregistered Activities in Poland:
You can issue invoices for unregistered activities, but you must comply with the requirements for unregistered business operations, such as simplified sales records and respecting consumer rights.
You are obligated to issue an invoice upon the customer’s request. It should include:
- Serial number;
- Issue date;
- Seller’s and buyer’s details;
- Product or service description;
- The amount to be paid.
If the customer requests the invoice within a quarter after the end of the month in which you delivered goods/services or received payment (or part of it), the invoice must include:
- Issue date;
- Invoice number;
- Names and addresses of the taxable persons and buyers;
- Product or service description;
- Measure and quantity of the goods/services provided;
- Unit cost;
- Total amount due.
In the case of unregistered sales, you can simply indicate your full name on the invoice, without the need to provide a PESEL number or company address.
Regulation of Income and Expenses from Unregistered Activities in Poland
An individual engaged in unregistered activities does not pay PIT (personal income tax), but the revenue must be reported in the annual PIT-36 report. In the report, there is an additional section “unregistered activity” that shows the income.
You can also deduct business-related expenses in the annual tax declaration (e.g., raw material purchases for manufacturing goods). These expenses must be documented, so it’s advisable to keep all proof of purchase.
Unregistered Business and VAT
Operating a business in Poland without registration exempts the entrepreneur from VAT.
However, certain types of businesses require VAT registration regardless of income. These include jewelry, legal, and consulting services (except for agricultural consultations related to plant growing, animal breeding, and farm development or modernization plans), debt collection services, supply of precious metal products, excise goods, vehicles, buildings, or construction sites.
Business Activity and Cash Register
In an unregistered business, a fiscal cash register is not required.
When running a business in Poland without registration, a cash register is not necessary (since the threshold that requires a cash register is PLN 20,000 in annual turnover). However, there are specific business activities where using a cash register is mandatory regardless of the profit. (Hairdressing services, passenger transport, vehicle repair, and mopeds).
Types of Activities in Poland That Do Not Require Registration
There are specific types of activities in Poland that do not need to be registered. These include:
- Agritourism;
- Wine production by farmers;
- Retail trade in agricultural products.
Agritourism
Income from renting rooms by farmers, selling homemade food, and providing other services related to tourists’ stay. If the farmer has no more than 5 rooms for rent, registering the business is not mandatory.
Wine Production
Wine production by agricultural producers who produce less than 100 hectoliters of wine during a marketing year does not require registration. However, the owner of the vineyard intending to release a wine product to the market must enter the producer’s registry.
Retail Trade in Agricultural Products
Selling non-industrial processed plant and animal products (except for products obtained in special agricultural production units and excise-taxed products) does not require registration under the following conditions:
- The processing of plant and animal products and their sale does not involve hiring people on an Umowa o pracę, Umowa zlecenia, Umowa o dzieło, or other similar contracts;
- Sales records are kept;
- The amount of agricultural products used in the production of this product, resulting from your own cultivation, breeding, or growing, must account for at least 50% of the product, excluding water.
It is important to note that there are several definitions of economic activity for entrepreneurs in legislation. If you do not meet the definition in one act, you may still fall under others (such as tax or insurance acts). An example would be the definition of an entrepreneur in insurance law, where a general partnership (Spółka jawna) is treated like an entrepreneur for insurance purposes, although under other rules, the partnership itself is considered the entrepreneur, not its partners.
The decision on whether to register and account for your business activity as an entrepreneur is especially crucial for Polish tax purposes. Even if you believe you’re not running a business, the tax authorities may have a different opinion. Leave a request for consultation, and our team will help you navigate Polish entrepreneurship and business regulations.
