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Polish order. Tax changes will reduce the number of the self-employed. Comment by PIE expert Jakub Rybacki

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The Polish Deal will reduce the number of sole proprietorships, believes Jakub Rybacki, an expert of the Polish Economic Institute. In his opinion, there will be fewer self-employed people in particular. According to the economist, the changes are to encourage the creation of more jobs based on standard jobs.

The Ministry of Finance published at the end of July a draft tax act that is part of the Polish Deal.

Polish Order – self-employed

As noted by Rybacki, the number of sole proprietorships has significantly increased since April last year, but this was the result of transforming employment contracts into a lower taxed form of B2B services, which means that many people turned to self-employment. – The reforms proposed in the Polish Lada will reduce the disproportions related to taxation, which should favor the creation of more jobs based on standard jobs – said the economist.

According to the Central Statistical Office (GUS) data, 4,694.9 thousand were entered into the REGON register at the end of March 2021. entities of the national economy – by 0.3 percent more than a month earlier and by 3.5 percent. more than in the corresponding period of the previous year. The increase in the number of newly registered entities was recorded for natural persons conducting business activity and amounted to 24%. Currently, according to the Central Statistical Office, natural persons running a business – 2,842,396. The largest group of entities are natural persons running a business. The Central Statistical Office estimates their number at 2,842,396.

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However, according to the official register of the Central Register of Economic Activity, there are no more than 2 million active natural persons running a business. The rest are entities with suspended economic activity.

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The COVID-19 pandemic and the situation of companies

According to official data from the REGON register, the number of companies closed increased by over 20% in the first half of 2021. yyyyy As noted by the PIE expert, commercial enterprises, which jointly accounted for 28 percent of submitted applications. – In the case of trade, however, we can speak of a continuation of the industry consolidation trend, which was visible even before the economic crisis related to the pandemic – he pointed out.

The industry hit hard by COVID-19 and related economic restrictions has hit service companies. As he said, high 25-35 percent. The increases in the number of closings are visible, among others, in training companies providing professional services (e.g. legal, accounting, marketing) and in industries servicing the commercial real estate market. He added that the crisis also hit some IT and construction companies.

– We expect that the upward trend in company closings will moderate in the coming months – the largest increase in closings occurred at the beginning of the year, and in June the result was close to 2020 – said Rybacki.

Polish Order – Lewiatan Confederation about the self-employed

According Konfederacji Lewiatan Polski Lad will hit the self-employed. “They conclude B2B contracts, are not bound by the labor code or exclusivity clauses. They are often sought-after specialists (managers, engineers, IT specialists, programmers) who carry out activities subject to general tax or flat tax” – explained.

Lewiatan’s calculations show that in their case, after the entry into force of the new regulations, the burdens will increase by almost 50 percent. As shown in the example, an engineer providing services under a B2B contract, taxed with a flat tax, earning an income after deducting social security contributions (PLN 1,457.49) in the amount of PLN 15,000, currently pays PLN 2,850 in tax, after the changes it will be PLN 4,200. This means an increase of PLN 1,350 per month. The amount is PLN 16,200 per year.

Polish Order – proposed changes

The Polish Order is a new socio-economic program for the post-pandemic period, endorsed by the parties forming the United Right. Its foundations are 7 percent. GDP for health; tax reduction for 18 million Poles (including the tax-free amount of PLN 30 thousand and raising the tax threshold from PLN 85.5 thousand to PLN 120 thousand), investments that are to generate PLN 500 thousand. new jobs, flats without own contribution and a house up to 70 sq m without formalities, as well as a tax-free pension up to PLN 2,500.

Main photo source: Shutterstock



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