This is general information, not tax advice. The best option depends on your figures. Consult an accountant before choosing a tax method.
Why B2B is popular
Many professionals in Poland, especially in IT, work as B2B contractors through their own JDG. This can be more tax-efficient than employment, but it shifts responsibility for taxes, ZUS and invoicing onto you.
The three taxation methods
A sole trader generally chooses one of three ways to be taxed.
- Progressive scale: 12 and 32 percent, with the tax-free amount.
- Flat tax: 19 percent on profit, regardless of level.
- Ryczalt: a lump-sum rate on revenue, with no expense deduction.
How to choose
The scale suits lower incomes that benefit from the allowance. The flat tax suits higher earners with meaningful expenses. Ryczalt can be attractive when expenses are low and the applicable rate is favourable, since you pay on revenue rather than profit.
VAT considerations
Freelancers must register for VAT once they exceed the threshold or if their activity requires it. VAT-registered contractors charge VAT on invoices, reclaim input VAT and file periodic returns.
- Small-business VAT exemption below the threshold.
- Standard rate of 23 percent on most services.
- Periodic VAT returns and the JPK file.
Staying compliant
Issue correct invoices, keep records, pay ZUS and tax advances on time, and file the annual return. Most freelancers use accounting software or an accountant to manage the moving parts.
Frequently Asked Questions
What is B2B work?
Providing services through your own business to a client, invoicing rather than being employed.
What tax methods can I choose?
The progressive scale, the 19 percent flat tax, or the lump-sum ryczalt on revenue.
When is ryczalt best?
Often when expenses are low and the rate for your activity is favourable, since it taxes revenue.
Do freelancers pay ZUS?
Yes, sole traders pay ZUS social and health contributions, with relief for new businesses.
When must I register for VAT?
Once you exceed the threshold or your activity requires it, regardless of turnover.
What is the standard VAT rate?
23 percent applies to most services, with reduced rates for some categories.
Can I deduct expenses?
Yes under the scale and flat tax, but not under ryczalt, which taxes revenue.
What is the JPK file?
A standardised VAT report filed electronically with your returns.
Can I change method each year?
Yes, you can usually switch methods at the start of a new tax year within deadlines.
Do I need an accountant?
Not legally, but most freelancers use one to handle tax, ZUS and VAT correctly.