A good manager in a company is a treasure. His proactive actions can be the driving force of many businesses. Working in such a position, often on a “B2B” contract, such people will often have to choose the best form of taxation. Of course, it depends primarily on the amount of revenues generated and the costs incurred. However, after the introduction of the so-called “Polish Deal”, taxation in the form of a lump sum on recorded income gained a lot of popularity. What does it look like from the perspective of people working as managers?
At the outset, it is worth emphasizing that the form of taxation in the form of a lump sum should be considered by people who do not have too high costs, i.e. do not incur a large number of expenses. This is due to the fact that this form of taxation applies only to the income itself, it is not reduced by the costs incurred. In addition, it is not possible to apply a joint settlement with a spouse or a child allowance plus it also has certain amount restrictions (the maximum amount of income is EUR 2 million). As you can see, the lump sum has its limitations, but it also has its advantages in the form of competitive (in relation to the tax scale or lump sum) tax rates.
In principle, when analysing the work of a manager, taking into account Article 12 sec. 1 point 2 letter m of the Act on Lump Sum Income Tax on Certain Revenues Earned by Natural Persons (hereinafter referred to as the “Lump Sum Act”), revenues from the provision of management consulting services (PKWiU code ex 70) are taxed at the rate of 15%.
In the advance tax ruling of the Director of the National Tax Information of 25 June 2021 (file reference number 0113-KDIPT2-1.4011.447.2021.1.MD), the provision of project management advisory services was deemed to be subject to this rate.
The 15% rate does not sound so attractive, but according to other positions of the tax authorities, it does not have to be the only appropriate one. It will vary depending on the type of actual activities that the manager performs.
For example, the advance tax ruling of the Director of the National Tax Information of 10 February 2023 (file reference number 0112-KDIL2-2.4011.963.2022.1.AG) states that services including, m.in:
- consulting in the field of coordination of business and project activities in enterprises,
- advising on coordinating the work of project teams of employees m.in controlling, logistics, accounting, sales, production and other departments,
- preparing and delivering reports on the findings made to managers and boards of directors of enterprises,
- advising on verification, control and preparation of proposals for changes to financial budgets and project budgets, including sales plans and forecasts,
- advising on the preparation of cost and revenue analyses of enterprises,
- advising on the financial (revenue and cost) assessment of new projects planned to be implemented in the company or currently underway,
- advising on improving the proper flow of information and data in individual enterprise systems (analytical and controlling systems),
- implementation of adopted solutions, including the preparation of instructions and/or internal training for employees of enterprises,
– may be subject to a lump sum of 8.5% pursuant to Article 12 sec. 1 point 5 letter a of the Lump Sum Act. This will be possible if the taxpayer classifies the services under PKWiU code 74.90.20 as other professional, scientific and technical activities, not elsewhere classified.
A similar conclusion is reflected in the advance tax rulings issued by the Director of the National Tax Information Service of:
- 14 April 2022 (file reference number 0114-KDIP2-1.4011.179.2022.2.MR);
- 19 September 2023 (file reference number 0112-KDSL1-2.4011.334.2023.2.KS).
Thus, when the manager’s activity boils down to coordination or project management, including consulting in this area, the tax authorities indicate that the correct lump sum rate is 8.5%.
To sum up, if you run a business in the field of coordination or project management along with consulting related activities, you will be able to take advantage of the 8.5% lump sum. Such conclusions can be drawn from the above-mentioned advance tax rulings. However, it should be borne in mind that the positions of the tax authorities in question apply only to these specific factual situations. Therefore, in order to ensure tax security in your case, it is worth considering filing an application for advance tax rulings in your case.