A preliminary paper on the Bill amending the Act on healthcare services financed from public funds and certain other acts (“the bill”) was published on the website of the Chancellery of the Prime Minister of Poland.1 The draft legislation sets health insurance contribution rates for entrepreneurs depending on the taxation scheme they are subject to for settling their taxes.
WHY THIS MATTERS
Aimed to balance the tax burden and support business growth, the new regulation on health insurance contributions would impact the profitability of businesses in Poland. The proposed changes would alter the attractiveness of various taxation forms, particularly reducing the appeal of the lump-sum tax for those earning over PLN 50,000 monthly. Entrepreneurs using the tax scale and flat-tax scheme, on the other hand, will benefit from the adjustments.
Key Changes
The key changes proposed for each taxation scheme are summarised below:
1) For those settling their taxes under general rules, tax scale, or flat-tax scheme, the bill provides for:
a) a fixed, low contribution rate, amounting to 9 percent of 75 percent of the minimum wage – for entrepreneurs earning in a given month an income of up to 1.5 times the average wage in the enterprise sector in the fourth quarter of the previous year, profit payment included, as announced by the President of Statistics Poland;
b) an additional contribution of 4.9 percent on the excess over 1.5 times the average wage – for entrepreneurs with income exceeding the threshold of 1.5 times the average wage;
c) repeal of the possibility of accounting for contributions paid in income tax – in the case of taxpayers using the flat-tax scheme.
2) For those using the lump-sum tax on recorded revenue scheme, the bill provides for:
a) a fixed, low contribution rate, amounting to 9 percent of 75 percent of the minimum wage – for entrepreneurs earning in a given month a revenue of up to 3 times the average wage in the enterprise sector in the fourth quarter of the previous year, profit payment included, as announced by the President of Statistics Poland;
b) an additional contribution of 3.5 percent on the excess over 3 times the average wage – for entrepreneurs with revenue exceeding the threshold of 3 times the average wage;
c) repeal of the possibility of deducting the contributions paid from revenue for tax purposes.
3) For those paying the fixed-amount tax and associates of individuals conducting non-agricultural business activity, the bill provides for:
a) a fixed, low contribution rate, amounting to 9 percent of 75 percent of the minimum wage;
c) repeal of the possibility of deducting the contributions paid from the fixed amount tax.
At the same time, the possibility to deduct health insurance contributions paid from income tax will be repealed.
KPMG INSIGHTS
The new regulations on health insurance contributions in Poland can significantly impact the profitability and attractiveness of different tax forms for businesses. Entrepreneurs affected by these changes are encouraged to contact their qualified tax service provider or a member of the GMS/tax team with KPMG in Poland for assistance or any questions they may have (see the Contacts section).
Footnote:
1 See (in Polish): Projekt ustawy o zmianie ustawy o świadczeniach opieki zdrowotnej finansowanych ze środków publicznych oraz niektórych innych ustaw.
Also, for additional information (in English and Polish) on the current situation, see this webpage: "What types of social insurance contributions an entrepreneur pays to the Social Insurance Institution (ZUS)" on the gov.pl website.
Contacts
More information
Disclaimer
The information contained in this newsletter was submitted by the KPMG International member firm in Poland.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2024 KPMG Sp. z o.o., a Polish limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.