Hi! My name is Stas, and I’ve been living in Poland for eight years, running my own business. In this video, I’d like to talk about one of the most common tax systems for sole proprietors in Poland — the so-called “podkowa” scale (skala podatkowa). If you’re planning to start your own business in Poland, this information will definitely be useful. It’s especially relevant for those earning up to 10,000 PLN per month.
When you register as a sole proprietor in Poland (działalność gospodarcza) and don’t select a specific tax system, the “podkowa” scale is applied to you by default. This system can be advantageous if your goal is to keep more of what you earn. It’s important to understand how it works.
The main threshold is 120,000 PLN per year. If your annual income doesn’t exceed this amount, you pay 12% income tax (PIT) and 9% in ZUS contributions — around 21% total. So if you earn up to 10,000 PLN per month, you’ll stay within this limit. If your income exceeds 120,000 PLN, the amount above this threshold is taxed at 41%.
There’s also a personal allowance — the first 30,000 PLN of your annual income is tax-free. This means if you make up to about 2,500 PLN per month, you won’t pay any income tax. However, you’ll still be required to pay ZUS contributions.
Another important point is VAT (Value Added Tax). Many people confuse it with income tax, but they are separate. If you’re registered as a VAT payer, you add VAT to your product or service prices. The client pays it, and you pass it on to the tax office. It doesn’t directly impact your income tax.
So, the “podkowa” tax scale can be a good option for those starting a business in Poland, especially with stable, moderate income, and for those who want to optimize their tax burden. If you plan to stay within the basic threshold and can manage your earnings flexibly, this system might suit you well.
If you have questions, feel free to leave them in the comments. Thanks for watching, and best of luck with your business in Poland!
