The Finance Ministry introduced the tax bill, an element of Polish governance, and after being questioned this week, Deputy Prime Minister Gowen was expelled from the government.
According to Hetmansky, the whole 9 percent should be entered into the fixed price system. A healthy rate and not a “patch, which only complicates the system”, otherwise the entrepreneurs would not jointly submit to the National Health Fund and it would not be possible to raise the money required to finance health care in the amount of 7% of GDP.
In general, we evaluate the proposed changes by the Ministry of Finance positively. It is good that 9 percent is offered. Contributions to Sole Proprietorship, with the only difference being that the department assumes that the default form of taxation for Sole Proprietorship now will not be a flat tax, as it once was, but a very large group of entrepreneurs will switch to a flat rate, up to a flat rate of 19 percent. 9 percent contributions to health “- said the president of the Instrat
He explained that in the case of lump sums, the system may be loosened, because entrepreneurs in this system will pay lower health insurance premiums.
Instead of simplifying the system and raising the burden on entrepreneurs and the self-employed to the level of employees with an employment contract, the Ministry of Finance plans to impose further corrections that will send false signals in the long run and discourage honest payment of taxes and contributions. In the lump sum, it will be possible to pay a radically reduced amount of the health contribution, that is, a third of the amount of the same tax contribution – says Hetmański.
The expert gives an example “If a self-employed IT professional earns 1 million zlotys a year and turns into a lump sum, then he will pay 12% of income tax plus only 4% to the National Health Fund and” pennies ”to ZUS. The business will still be huge, he explained.
He added that the data provided by the Ministry of Finance showed that in order to finance health care expenditures in the amount of 7 percent. GDP, it takes about 42 billion PLN annually to transfer annually to the National Health Fund. However, the Ministry itself reports that thanks to the reform it will be possible to mobilize funds for the National Health Fund in the amount of only PLN 12 billion, which is more than three times.
Experts from Instrat note that the Regulatory Impact Assessment indicates that the package of changes around the tax contribution wedge will lead to a loss of about PLN 11 billion to the state budget on reform, local governments – an additional PLN 15 billion, and the national. Thanks to the increased health contribution of entrepreneurs, the Health Fund will receive about PLN 12 billion. As Instrat experts state, such a situation poses a risk that local governments will cut their investments in healthcare as a result of the cuts, and the increase in the budget of the National Health Fund will not be enough to reach the 7% level. Gross domestic product.
– In general, we evaluate the proposed changes by the Ministry of Finance positively. The tax cut for low-income earners and the fact that 90% would benefit from the reform. taxpayers, but without significant solidarity on the part of entrepreneurs, this reform will lead to a collapse of public finances – said Hetmański.
– In principle, we agree that the exemption amount should be increased. He added that a potentially professionally energizing solution would be to increase employee tax credit costs.
As part of the Polish system, the government intends to eliminate the possibility of deducting health insurance fees from taxes. This applies to both persons employed under an employment contract and persons who operate a company. According to the analysis by Kancelaria Ożóg Tomczykowski Spółka Doradców Podatowych, in combination with the liquidation of the gross health contribution, this means an actual increase in income tax rates.
– For taxpayers who pay using the tax ladder or 19-rpoc. Flat rate tax, the premium is calculated at 9 percent. Income from economic activity within the meaning of the Income and Investment Tax Law. It should be noted that the health insurance premium calculated on the basis of the new rules will no longer be deducted from the comprehensive income tax. Practically speaking, a change in the method for calculating the health insurance contribution can be equated with an increase in EBIT rates of 7.75%. – stated in the analysis of the law firm Ożóg Tomczykowski.
It was pointed out that the health insurance premium will be calculated slightly differently in the case of people who pay tax on registered income. In this case, the basis for calculating the contribution will be income minus paid social security contributions, and the rate will be equal to one third of the total amount paid by the taxpayer.
The analysis also indicates that the bill contains a change regarding the sale of assets previously used in business activities. Current regulations state that revenue from the sale of a fixed asset (or intangible asset) is treated as income from economic activity if the sale is made within 6 years of the asset being withdrawn from economic activity or liquidation.
However, as stated in the analysis by Ożóg Tomczykowski Law Firm, slightly different rules apply to objects in the business, used on the basis of an operating lease agreement (eg cars). If the lessee purchases such an item in private ownership, the proceeds from its sale do not qualify as arising from economic activity. If the sale is made 6 months after purchase, the income is completely tax-exempt.
“The Ministry of Finance plans to prevent taxpayers from using the above preferences. In line with the proposed wording of Section 14(2)(19) of the Income Tax Law, sale of fixed assets purchased from an operating lease into private ownership (such as automobiles), provided that Within 6 years since their withdrawal from economic activity, it will generate income from economic activity ”- it is indicated in the analysis.
She noted that the rules for determining the initial value of the company’s contributing assets that were used prior to the contribution will also change. Currently, the law allows for depreciation purposes, among other things, fixed assets and intangible assets as the initial value, among other things, the purchase price. As a result, even if the fixed asset has been used for several years, write-offs of depreciation can be made from its initial value, which is undoubtedly a convenient approach for taxpayers.
“The amendment introduced by the bill provides that when an asset is introduced into economic activity that was previously used by an individual for private purposes, its initial value will be equal to the purchase price or the market value if it is less than the purchase price (…) As a result of this change, the taxpayer will make Less write-offs for the value of assets submitted to the enterprise ”- wrote the analysis of tax consultants from Kancelaria Ożóg Tomczykowski.
She added that the tax on income from apartment rentals would also change. If the draft amendment to the Income Tax Law enters into force in its current form, as of January 1, 2022, it will not be possible to apply depreciation charges to buildings or apartment buildings. In addition, such real estate used in commercial activities will not be included in the fixed asset register.
The analysis indicated that the new proposals will mean that from January 1, only private rent will be taxed with a flat tax on recorded income. The tribute rate should remain at the current level, so it will reach 8.5 percent. On revenue of less than 100 thousand. PLN and 12.5 per cent. in excess of this amount.
Analysis was written by Ożóg Tomczykowski.
The Polish deal’s tax proposals will pass the costs of a slight tax cut to entrepreneurs, and especially to retirees, estimating sacked Deputy Prime Minister Jaroslaw Guin. He criticized, inter alia, the suggestion that health insurance could not be deductible from taxes.
According to the proposal of the agreement, in the case of a flat tax, the health insurance contribution will be 9%, but it will be calculated on the average salary – currently it will be PLN 509 per month. – This is certainly less than what the Ministry of Finance has suggested, although I am aware that even this kind of growth can be painful for the smallest companies – suggested former Deputy Prime Minister Gowen.
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