Lump-sum tax from 2027: revenue limit reduced from EUR 2 million to EUR 250,000, a new 17% rate and how to calculate the limit for sole traders, civil-law partnerships and general partnerships

Dear Sir or Madam,

On 22 October 2026, the Sejm passed the government bill amending the income tax acts (Sejm paper no. 3147), which is intended to significantly restrict access to lump-sum tax on recorded revenue from 1 January 2027. The legislation has been referred to the Senate and, once parliamentary work is complete, will await the President’s signature. The revenue limit determining eligibility for this form of taxation is to be reduced eightfold, from EUR 2,000,000 to EUR 250,000, while revenue exceeding EUR 300,000 during the year is to be taxed at 17%. Particularly importantly, under the final version of the bill, eligibility for lump-sum taxation in 2027 will depend on revenue already earned in 2026, the year that is now drawing to a close. At present, there are no transitional provisions.

• A drastic reduction in the limit: From 2027, the revenue limit for lump-sum taxation falls from EUR 2 million to just EUR 250,000.
• Watch your 2026 revenue: Your eligibility for lump-sum taxation in 2027 will depend on revenue earned in the current year, 2026 (the bill contains no transitional provisions).
• A new penalty rate: Revenue exceeding EUR 300,000 during the year will be taxed at a new, higher rate of 17%, regardless of the industry.
• Action is needed: If your 2026 revenue is approaching the equivalent of EUR 250,000 (approximately PLN 1.09 million), this is the last opportunity to analyse the cost-effectiveness of other tax regimes (the progressive tax scale or flat-rate income tax) or to restructure your business, for example by converting it into a limited liability company using the Estonian CIT regime.

Below, we present the key information, answers to the questions most frequently asked by our Clients and our recommendations. This overview reflects the legislative position as at 26 October 2026.

Article 3 of the bill amends the Act of 20 November 1998 on lump-sum income tax on certain revenue earned by natural persons (the “Lump-Sum Tax Act”) by replacing “EUR 2,000,000” with “EUR 250,000” in Article 6(4)(1)(a) and (b) and Article 6(6). Only the amount of the limit is therefore being changed; the structure of the provisions remains unchanged, which is of crucial importance to taxpayers.

The bill also introduces a new mechanism: revenue earned during the year in excess of EUR 300,000 is to be taxed at 17%, regardless of the lump-sum rate applicable to the particular type of business, in the order in which revenue is earned during the tax year. The changes are intended to apply from 1 January 2027.

Amounts expressed in euros are converted into Polish zlotys using the National Bank of Poland’s average exchange rate on the first working day of October in the year preceding the tax year. The rate on 1 October 2026 (table no. 191/A/NBP/2026) was PLN 4.3770, producing the following amounts:

* Assuming conversion at the same exchange rate. The method for converting the EUR 300,000 threshold must be confirmed in the final text of the legislation.

Under Article 6(4)(1) of the Lump-Sum Tax Act, eligibility for this form of taxation is assessed on the basis of revenue earned in the year preceding the tax year. Since the bill contains no transitional provision, eligibility for lump-sum taxation in 2027 will depend on 2026 revenue, assessed against the new limit of EUR 250,000 (PLN 1,094,250). This means that a taxpayer who earned, for example, PLN 1.5 million in revenue in 2026 while acting in full compliance with the law then in force will lose eligibility for lump-sum taxation as early as 1 January 2027. We therefore recommend taking a cautious approach:

• Revenue in 2026 did not exceed EUR 250,000: lump-sum taxation may be used in 2027, provided the other statutory conditions are met.
• Revenue in 2026 exceeded EUR 250,000: from 1 January 2027, taxation under the progressive tax scale or flat-rate income tax at 19% will be necessary. Choosing flat-rate income tax requires a declaration to be submitted on time, by the 20th day of the month following the month in which the first revenue in 2027 was earned (if revenue is earned in January, by 20 February 2027).
• Business commencing in 2027: a taxpayer starting a business during the tax year may choose lump-sum taxation without assessing the previous year’s revenue limit (Article 6(4)(2) of the Lump-Sum Tax Act), provided none of the exclusions in Article 8 of that Act applies.

A taxpayer who satisfies the revenue-limit condition for 2026 retains eligibility for lump-sum taxation throughout 2027, even if revenue exceeds EUR 250,000 during the year. The consequences of exceeding the respective thresholds during the year are as follows:

• Revenue up to EUR 250,000: lump-sum tax at the existing rate applicable to the business; eligibility for lump-sum taxation in 2028 is retained.
• Revenue above EUR 250,000 but no higher than EUR 300,000: the taxpayer continues to apply the basic (selected) lump-sum rate in 2027 but loses eligibility for lump-sum taxation from 1 January 2028.
• Revenue above EUR 300,000: the excess over EUR 300,000 is taxed at 17% (in the order in which revenue is earned during the year), and the taxpayer loses eligibility for lump-sum taxation from 1 January 2028.

Example: A sole trader paying lump-sum tax at 12% earned PLN 950,000 in revenue in 2026 and can therefore remain under the lump-sum regime in 2027. In 2027, their revenue amounts to PLN 1,500,000. Assuming that the EUR 300,000 threshold is PLN 1,313,100, the tax payable will be (in simplified terms, without deductions): 12% of PLN 1,313,100, or PLN 157,572, plus 17% of the excess of PLN 186,900, or PLN 31,773, giving a total of PLN 189,345. From 1 January 2028, the sole trader will have to switch to the progressive tax scale or flat-rate income tax.

Where a business operates as a partnership that is not a CIT taxpayer, the limit applies to the combined revenue of all partners from the partnership’s business, rather than to the revenue attributable to each individual partner. The amendment changes only the amount of the limit and leaves this rule unchanged. Following the amendment, Article 6(4)(1)(b) of the Lump-Sum Tax Act will provide that taxpayers may pay lump-sum tax if, in the year preceding the tax year:

“they earned revenue exclusively from business conducted in the form of a partnership, and the combined revenue of the partners from that business did not exceed EUR 250,000”.

Example. A civil-law partnership with three partners earned PLN 1,200,000 in revenue in 2026 (PLN 400,000 per partner). Although each partner’s share is comfortably within the limit, the partnership’s combined revenue exceeds PLN 1,094,250. None of the partners will therefore be entitled to pay lump-sum tax on revenue from that partnership in 2027.

For partnerships with several partners, the new limit means in practice that lump-sum taxation will remain available only to very small businesses. The bill does not expressly resolve how the EUR 300,000 threshold for the 17% rate should be calculated for a partnership. Until this issue is clarified, we recommend cautiously assuming that, like the eligibility limit, it applies to the partnership’s combined revenue.

Under Article 6(5) of the Lump-Sum Tax Act, where a taxpayer conducted business both independently and in the form of a partnership in the year preceding the tax year, they pay lump-sum tax on recorded revenue in the tax year:

“1) separately on business conducted independently and separately on business conducted in the form of a partnership, where the conditions in paragraph 4(1) are met, or 2) on business conducted independently, where the condition in paragraph 4(1)(a) is met, and on business conducted in the form of a partnership, where the condition in paragraph 4(1)(b) is met”.

The provisions therefore do not require revenue from different forms of business to be aggregated. The limit is assessed separately: for a sole tradership, on the basis of the taxpayer’s revenue from business conducted independently; for a partnership, on the basis of the partners’ combined revenue from that particular partnership (each partnership is assessed separately). This position has been confirmed by the Director of National Tax Information, including in individual tax rulings of 15 September 2025, ref. 0113-KDIPT2-1.4011.591.2025.2.MAP, and 15 June 2026, ref. 0114-KDIP3-2.4011.556.2026.1.MT. In the latter, the authority held that exceeding the limit in business conducted independently does not remove eligibility for lump-sum taxation on revenue from civil-law partnerships, because “the provisions do not impose an obligation to aggregate revenue earned from different forms of business activity”.

Consequently, exceeding the limit in a sole tradership in 2026 does not, as a rule, prevent revenue from a civil-law or general partnership established in 2027 from being taxed under the lump-sum regime. A partnership starting its business has no revenue from the previous year, while the sole tradership may at that time be taxed under the progressive tax scale or flat-rate income tax. However, this solution requires very careful analysis, particularly in view of the risks described below.

• A partnership with a spouse. Article 8(1)(5) of the Lump-Sum Tax Act excludes lump-sum taxation, among other cases, where a taxpayer switches from business conducted independently to business conducted as a partnership with a spouse, if the business was taxed under the general rules before the change. Thus, if a sole tradership is already taxed under the progressive tax scale or flat-rate income tax in 2027, and the entrepreneur establishes a civil-law partnership with their spouse and transfers that business to it, the partnership will not be entitled to use lump-sum taxation.
• Transferring the entire business from a sole tradership to a partnership. If the clients and the same scope of services are transferred to a new partnership solely to “reset” the limit, there is a significant risk that the transaction will be regarded as artificial and the general anti-avoidance rule will be applied (Article 119a of the Tax Ordinance). The rule applies where the tax benefit exceeds PLN 100,000 in a settlement period (Article 119b § 1(1) of the Tax Ordinance). Given the difference between lump-sum tax and the progressive tax scale or flat-rate income tax, this threshold may easily be exceeded. A genuine commercial reason for the change is crucial, for example admitting a partner who contributes capital, expertise or clients, or separating a distinct area of business.
• A partnership with an employee / services for a former or current employer. Under Article 8(2) of the Lump-Sum Tax Act, lump-sum taxation does not apply to revenue from services supplied to a former or current employer that correspond to activities performed by the taxpayer or at least one partner in the partnership under an employment relationship in the year preceding the tax year or during the tax year. It is therefore sufficient for just one partner to satisfy this condition.
• All partners must elect lump-sum taxation. Under Article 9(2) of the Lump-Sum Tax Act, where business is conducted in the form of a partnership, all partners must submit a declaration electing lump-sum taxation. A single partner cannot independently choose this form of taxation.
• A general partnership with a corporate partner. In an individual tax ruling of 3 June 2026, ref. 0112-KDIL2-2.4011.313.2026.4.AG, the Director of National Tax Information refused eligibility for lump-sum taxation in a general partnership whose partner was a limited liability company.
• Other exclusions under Article 8 of the Lump-Sum Tax Act, including certain types of business such as operating pharmacies, trading in currencies, vehicle parts or excise goods, should be checked separately for each form of business.

Does a ruling obtained under the previous provisions still provide protection? An individual tax ruling does not confer “acquired rights” to a particular form of taxation in subsequent years. Under Article 14k § 1 of the Tax Ordinance, compliance with an individual tax ruling must not prejudice the applicant. However, this protection applies only to the applicant and to the legal position under which the ruling was issued. Administrative courts indicate that, once the provisions covered by the ruling change, its protective effect expires. Protection therefore does not cover events occurring after that change (see, for example, the judgment of the Provincial Administrative Court in Białystok of 8 November 2023, ref. I SA/Bk 374/23). This is so even though the Tax Ordinance does not provide for the ruling to expire by operation of law and it may still be listed as “current” in the EUREKA search engine.

In the case of lump-sum tax, the amendment changes only the amount of the limit in Article 6(4) of the Lump-Sum Tax Act; it does not amend Article 6(5), which provides for separate assessment of limits for a sole tradership and a partnership. In our view, the substantive position in existing rulings (separate limits and no aggregation of revenue) therefore remains fully relevant and may be cited as an important argument. Formal protection is a different matter: a ruling issued when the limit was EUR 2 million does not guarantee protection for tax settlements for 2027 and subsequent years. This is particularly relevant where the ruling expressly referred to the amount of the limit or the facts have changed, for example because a new partnership has been established. Rulings issued to other taxpayers, including those cited above, do not provide you with legal protection; they merely indicate the authority’s position.

The bill (no. UD 458 in the Council of Ministers’ legislative work programme) was adopted by the government on 29 September 2026 and referred to the Sejm (paper no. 3147). The first reading took place on 6 October 2026, after which the bill was referred to the Public Finance Committee. The Committee supported the proposed changes and rejected, among other amendments, a proposal to abandon the reduction in the lump-sum revenue limit. The second reading took place on 21 October 2026 and the third reading on 22 October 2026. On 23 October, the bill was referred to the Senate. Senate consideration and the President’s signature remain outstanding. For the new provisions to apply from 1 January 2027, the legislation should be promulgated by the end of November 2026.

The final wording of the provisions, including the possible introduction of a transitional provision, may still change. We will keep you informed of further developments in the legislative process.

• Review 2026 revenue: compile year-to-date revenue together with a forecast to 31 December 2026 and compare it with PLN 1,094,250 (for partnerships, use the combined total for the whole partnership).
• Determine correctly when revenue arises: revenue around the year end must be recognised in accordance with the applicable provisions. Artificially shifting sales or invoicing to 2027 may be challenged by the tax authorities.
• Compare tax options for 2027: the progressive tax scale, flat-rate income tax (taking account of the health insurance contribution) and, for larger businesses, conversion into a company, including one using the Estonian CIT regime.
• Analyse a possible change of structure (sole tradership plus a partnership): only where there is a genuine commercial justification. In case of doubt, consider applying for an individual tax ruling, for example on Article 8 of the Lump-Sum Tax Act, or for a protective opinion.
• Monitor deadlines: submit declarations electing flat-rate income tax or lump-sum taxation on time (for a partnership, all partners must submit them) and monitor the final text of the legislation.

If you are interested, we will be pleased to assess whether, and on what terms, you will be able to use lump-sum taxation in 2027, analyse your 2026 revenue, compare tax burdens under the available options and assess the safety of any changes to your business structure, including an application for an individual tax ruling or a protective opinion where necessary. We will be happy to analyse your specific situation and develop an individual strategy. Please contact us.

Existing rulings issued when the limit was EUR 2 million should be reviewed for continued relevance. Following the change in the provisions, their protective effect for 2027 tax settlements may prove limited.

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