What changes in tax limits await entrepreneurs in 2024?

The first significant change in tax limits concerns the use of the status of a small VAT payer. According to the statutory definition, a small VAT payer is an entity whose sales value (including the amount of tax) did not exceed EUR 2,000,000 in the previous tax year. In the Polish economic situation, this limit is converted according to the average euro exchange rate announced by the National Bank of Poland on the first business day of October of the previous tax year. The calculation is rounded to PLN 1,000.

Taking into account the above, in order to be able to benefit from the status of a small VAT payer in 2024, the sales value in 2023 cannot exceed PLN 9,218,000.

This limit, converted into Polish currency for the second half of the current year, i.e. 2023, amounted to PLN 9,654,000. The limit planned for the coming year is reduced by over PLN 500,000 compared to the current year. Its reduction is associated with limiting the number of business entities that meet the conditions for being recognized as small taxpayers.

Limit of PLN 2,000,000 in the CIT and PIT Act

However, the limit of EUR 2,000,000 does not apply only to tax on goods and services. Its value is the same for a small taxpayer in personal income tax and corporate income tax in relation to revenues for the previous year.

What does it really mean to benefit from the status of a small taxpayer in CIT? In practice, a small CIT taxpayer is entitled to settle accounts at a reduced tax rate of 9 percent. He is also entitled to make one-off depreciation write-offs on fixed assets included in groups 3-8 of the Classification of Fixed Assets (excluding passenger cars) up to the equivalent of EUR 50,000. However, it should not be forgotten that the use of this rate covers more than just the above. premise. In addition, the taxpayer:

• in 2024, it cannot record current revenues exceeding the limit of EUR 2,000,000 converted using the exchange rate as of the first business day of January 2024.

Limit for entities settling a lump sum on recorded revenues

Changes in limits will also be felt by entities using lump sum settlements on recorded revenues. This settlement can be applied to income:

• from business activities conducted solely independently, not exceeding EUR 2,000,000,
• exclusively due to participation in the company – on the revenues earned jointly by the partners, if the total revenues of the partners do not exceed PLN 2,000,000.

When converting these limits, despite using the same exchange rate as above, rounding to PLN 1,000 is not used. For this reason, this limit will be PLN 9,218,200 in 2024.

Limit of PLN 2,000,000 in the Accounting Act

EUR 2,000,000 is also the limit included in the Accounting Act. It concerns net revenues from the sale of goods, products and financial operations for the previous financial year. If the above revenues exceed the indicated threshold, the business entity will be obliged to keep full accounting books. The conversion is carried out in the same way as in the case of the lump sum limit on recorded income. In 2024, entrepreneurs whose indicated revenues exceed PLN 9,218,200 will be legally obliged to keep full accounting for their entity.