Relief for Start in Poland

August 7, 2023

What is a Relief for Start?

Relief for Start is a particular convenience addressed for start-up entrepreneurs. It allows them to minimize business costs for the first six months and be exempt from specific contributions.

By taking the Relief for Start, the entrepreneur can have some perks for six months. It is essential to understand the concept of “full” months since the date of commencement of the business has an impact on the duration of the Relief:

  • If the commencement of the business took place on the first day of the month, then from this month, when the use of the Relief begins
  • If the business commenced during the month, this month is not included in the period of 6 months, which means that the entrepreneur will benefit from the Relief for an additional whole month.

Who can benefit from the Relief?

Three requirements must be met to benefit from the Relief for Start, which were listed earlier. Here’s a short list summarising who can benefit from this Relief. Natural persons can take advantage of the discount if:

  • They set up a company for the first or subsequent time, but at least 60 months have passed between the suspension or closure of the previous business and the Start of the new one.
  • They plan to work on their account as a sole trader or partner in a civil law partnership.
  • Refrain from performing activities for their former employer, i.e. the persons will not provide services or work for the employer who employed them in the current or previous calendar year if the scope of duties performed as part of the full-time and activity overlap.

Who cannot benefit from this Relief?

  1. People planning to cooperate with their former employer and perform activities for him that fall within the scope of former employee duties. They will not benefit from this Relief.
  2. People who plan to set up a company in a form other than a sole proprietorship or a civil partnership. If they intend to form, for example, a limited liability company (sp. z o.o.) or a different structure, they will not qualify for the Relief.
  3. People for whom at least five years have yet to pass since the date of suspension or closure of their previous activity. If they previously operated a business that ended within the last five years, they will not be entitled to use the Relief when setting up a new business.

It is important always to read the regulations and criteria regarding the Relief for Start to ensure one’s meeting the requirements and whether the Relief can be used to set up the company in Poland.

What ZUS contributions are exempt from the Relief for Start?

The Relief for Start provides an exemption from the following ZUS (Social Insurance Distribution) contributions:

  1. Social security contributions: include pension, disability and accident contributions.
  2. Labour Fund contributions: the Labour Fund is responsible for financing labour, market policies and activities linked to employment.
  3. Solidarity Fund contributions: the Solidarity Fund is responsible for financing benefits in the event of sudden natural disasters and other emergencies.

Does the Relief exempt from health contributions?

This Relief does not exempt entrepreneurs from the obligation to pay health contributions. Health contributions are compulsory, and every entrepreneur must pay them. The amount of health contribution depends on the chosen form of taxation. Here are the rules for calculating it:

  1. Tax scale: the health contribution is 9% of the contribution assessment basis. This basis is usually determined based on the entrepreneur’s income after deducting the tax-deductible costs.
  2. Flat tax: when taxed according to the flat tax, the health contribution is 4.9% of the contribution assessment basis. Similarly, like in the tax scale, the contribution base depends on the entrepreneur’s income.
  3. Lump sum on recorded income: In the case of a lump sum, the health contributions are a fixed amount depending on a specific range of revenue and not on the exact amount of income.

What does the Relief for Start involve?

Using the Relief for Start may have some advances in the form of lower ZUS contributions, but it is also associated with inevitable consequences that are worth remembering:

  1. No entitlement for benefits: People receiving the Relief for Start are not entitled to sickness benefits in case of illness, maternity allowance in case of pregnancy and childbirth or care allowance in case of having to care for a child.
  2. No rehabilitation benefit: As a part of the Relief, entrepreneurs also do not receive a rehabilitation benefit, which is entitled to people with health problems and needing rehabilitation.
  3. No pension contributions: The period covered by the start Relief will not be considered when determining the right to a pension. This means that people benefiting from this Relief do not pay contributions to the pension insurance, which may affect the amount of their retirement in the future.

How to apply for the Relief?

To apply for the Relief, you should follow these steps:

  1. Fill out the ZUS ZZA form: Notification for the start discount occurs on the ZUS ZZA form. If you also want to register a family member for health insurance, additionally fill out the ZUS ZCNA form
  2. Select the proper insurance code: The insurance code consists of six digits, the initial four of which are fixed (05 40). The fifth and sixth digits depend on your situation. Choose the proper numbers based on your retirement situation and any disability certificate. Based on these numbers, you will create your insurance code.
  3. Report to ZUS: You can register to ZUS in several ways: either when registering the company in CEIDG, through the ePłatnik app, through the Płatnik program or by sending forms in paper form.
  4. Deadline: You have seven days from the commencement date of the activity to apply for Relief.

Is the Relief for Start compulsory?

No, the relief for Start is voluntary. The entrepreneur takes advantage of the Relief and pays lower ZUS contributions in the first six months of running a business. However, Relief use has consequences, such as not being entitled to certain benefits and allowances. Entrepreneurs should consider whether the Relief for Start is beneficial for them, considering their financial situation and needs. After six months, if they still want to benefit from lower contributions, they can take advantage of the so-called ZUS contributions in a reduced amount for the next 24 months.

Text based on: https://www.biznes.gov.pl/pl/portal/00285.

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