Whether a business will be cheap to run depends on what it entails. It turns out that it is possible to earn a decent amount of money without having to pay ZUS contributions and other fees related to running a business. The only requirement is to be the owner of property, because as it turns out in Poland you can do more.
Short‑term rental treated “exceptionally”
That a property owner can do more is not just theoretical speculation, but an example of practical application of regulations that the tax office agreed to. It concerns a man who approached the National Tax Information Service for an interpretation of his situation. He owns two apartments that are rented to tourists. It is short‑term rental, from which the owner earns 30 to 40 thousand PLN in revenue per year. In his application to the tax office, the property owner emphasized that he handles guest services himself. He cleans the apartments without using other companies’ services. He does not employ staff or provide services typical of hotels, such as 24‑hour reception or catering. The short‑term rental offer is listed on the owner’s website and on rental portals.
In the man’s assessment, he should pay a flat tax of 8.5%, without having to register a business. Interestingly, the director of the National Tax Information Service agreed with the property owner on the most important matters, including the tax rate he must pay. The official stated that the rental income described in the application can be classified as private rental, not non‑agricultural business activity. The tax office determined that the scale of the activity is small, so there is no need to register a company, because the apartment owner manages guests himself, handling his own property as allowed by law. The tax office concluded that the short‑term rental described in the application does not meet the criteria for a professional hotel business. The 8.5% tax rate can apply in such a situation up to 100 thousand PLN of annual revenue. Above that amount it should be increased to 12.5%, but registration of a business is still not required.
Did the tax office show a “human face”?
Hearing the example of a man providing short‑term rental services raises the question of whether a property owner can do more. Are some businesses treated favorably under Polish law? Perhaps because politicians own many apartments they rent out, so they don’t change the rules to avoid harming themselves?
It is hard to expect such a favorable tariff for other businesses. Especially after hearing about a pizza shop in Gdańsk, where a tax officer imposed a fine of 2.5 thousand PLN on the owner for charging the wrong tax on his pizza. For those who have not heard of this case, I will describe the situation. The case involved a restaurant that a tax officer visited. She first ordered shrimp pizza, and after receiving the bill, she imposed a fine of 2.5 thousand PLN on the restaurateur. The penalty was due to the wrong tax applied to the bill. It was 8%, which the officer considered a mistake because shrimp are subject to a 23% tax, so – according to her – the entire pizza should be taxed at the same rate, i.e., 23%. Interestingly, the normal tax on pizza is indeed 8%, except for those containing seafood, which are subject to a higher rate.
Hearing such situations and comparing them to a guest who rents apartments without having to set up a company raises reflections on why some are allowed more than others, and why some are penalized even for minor mistakes? Should this be the case in the rule of law? Does anyone in Poland still govern this?
See also: 2.5 thousand PLN fine. Is it a mistake by the entrepreneur or a deliberate action by officials?
