Economy

Entrepreneurs in Poland have until February 20th to select their form of taxation for 2026, a decision that could significantly impact their financial obligations. The choice between the progressive tax scale, the flat tax, and the lump-sum tax depends on individual circumstances, with potential differences in overall tax burdens and social security contributions, according to tax advisors.

The selection process involves submitting a declaration to the relevant tax office, either in paper or electronic form. Those utilizing the Central Register of Beneficial Owners (CEIDG) can use the “Declaration of Income Tax Payment Form,” choosing one of the three available options. Selecting a new form automatically cancels the previous one.

This opportunity is particularly relevant for individuals operating as business-to-business (B2B) contractors rather than traditional employees, contributing to the growing popularity of the lump-sum tax, which offers ten different rates depending on the profession and services provided. Monika Piątkowska, a tax advisor at e-pity, emphasized the importance of optimizing taxes through this choice, stating, “The best form of taxation for a given entrepreneur depends on their income, type of activity, and available tax reliefs.”

Piątkowska illustrated the impact of these choices with an example: a self-employed office worker, referred to as Pani Asia, would face a 12% tax rate on income exceeding the tax-free threshold under the progressive scale, rising to 32% above 120,000 zł. The flat tax would apply a consistent 19% rate, while the lump-sum tax for her services is 8.5% of revenue.

Beyond income tax rates, health insurance contributions and access to tax reliefs also play a crucial role in determining the most advantageous option. The ability to jointly file taxes with a spouse, or to utilize the tax-free allowance, is exclusive to those using the progressive tax scale. The lump-sum tax requires payment of tax on gross income, precluding the deduction of expenses, which is permitted under the progressive scale and flat tax.

Joanna Łuksza, head of a team of accounting experts at IFIRMA, highlighted the need for a comprehensive calculation, including income, expenses, and social security contributions. She noted the importance of factoring in health insurance contributions, which have been a significant consideration since 2022, stating that focusing solely on the lowest tax rate can be misleading if it results in higher overall public liabilities.

Łuksza also pointed out that additional income sources, such as employment or pensions, and family situations, such as marital status, can influence the optimal tax form. For example, a recent marriage allows for joint tax filing for the entire year, benefiting the progressive scale. Tax reliefs, such as the child tax credit (available only under the progressive scale) and the IP BOX (5% tax) for innovators (available only under the flat tax and progressive scale), must also be considered.

Entrepreneurs earning over 1 million zł annually must also account for the potential solidarity surcharge, which does not apply to those using the lump-sum tax. Łuksza advised individual assessment, noting that a consistent income and business profile may justify remaining with the current tax form, but a thorough review is recommended for those unsure of their optimal choice.

The increasing trend of B2B contracts over traditional employment is driving the popularity of the lump-sum tax, particularly for professions benefiting from preferential rates of 5.5% and 8.5%, significantly lower than rates applicable to employees. This shift has sparked debate, with critics arguing that it creates an unfair advantage, especially given the frozen tax brackets and personal allowance for employees. The government is currently addressing this issue through reforms to the Public Employment Agency (PIP).

German restaurants are bracing for a shift in pricing strategies as alcohol consumption declines, according to industry experts. The trend, confirmed by data from the Deutsche Hauptstelle für Suchtfragen (DHS), shows a steady decrease in per capita alcohol consumption – falling from 154 liters in 2000 to 120 liters in 2022, and further to 115 liters in 2023.

The changing drinking habits are poised to reshape the economics of dining out, experts say. Moritz Dietl, a gastronomy consultant at Treugast, explained that beverages typically account for 40 to 60 percent of restaurant revenue, a figure that rises significantly in establishments like traditional breweries. Even as beverage margins are often higher, Dietl points to inconsistent food cost control as a contributing factor. “Many restaurateurs don’t have a firm grip on their food costs,” he said, citing the need for precise recipe adherence and portion control. He noted that technologies like AI-powered plate scanning to minimize waste and optimize portions are not yet widely adopted.

Heineken Deutschland reports a 31 percent organic growth in its “Low-&-No-Alcohol” segment since 2020, with the restaurant sector showing a particularly strong preference for these alternatives. Jan Stickelmann, Sales Director at Heineken Deutschland, stated that the company is actively expanding its non-alcoholic offerings to meet the growing demand. “We are seeing a stronger overall trend towards premiumization,” Stickelmann said. “The focus is increasingly on quality, brand, and enjoyment, both for alcoholic and non-alcoholic beers.”

The price disparity between alcoholic and non-alcoholic beverages is expected to narrow. Dietl questioned the logic of cheaper non-alcoholic options, asking, “Why should non-alcoholic drinks be cheaper?” He anticipates a move towards price equalization, particularly for complex cocktails.

Some restaurateurs are already considering significant menu adjustments. Billy Wagner, owner of the Michelin-starred Nobelhart & Schmutzig in Berlin, told the Tagesspiegel that water is becoming the dominant beverage choice, while non-alcoholic options haven’t generated the same revenue as alcohol. Wagner plans to offer “higher-quality” non-alcoholic beverages, potentially priced at €70 for two glasses.

Dietl cautioned that such high prices may be demanding to sustain, but acknowledged the need for adaptation. He observed a broader shift in dining culture, noting that in many countries with traditionally lower alcohol consumption, the restaurant industry remains vibrant. “Those who stubbornly cling to the past risk extinction,” he said.

Michael Bauer, a hotel and gastronomy reviewer, echoed this sentiment, predicting a decline in traditional establishments where long, alcohol-fueled gatherings were commonplace. He suggested that restaurants will need to expedite service to manage rising personnel costs, potentially limiting seating times. Bauer also noted a growing trend of diners being preoccupied with their mobile devices, shifting the social dynamic of the restaurant experience. “Today, you see mobile phones on every table,” he said. “This constant connectivity is impacting the restaurant industry as well.”