Undeclared activity, i.e. business on trial
Unregistered activity is one of the forms of running a business. Do you know that you can provide services and receive remuneration for them, and you do not need to register with CEIDG, have a tax identification number and an accountant, i.e. start a business?
Not everyone knows about it, and this is a brilliant way
I often recommend this solution to future wedding planners who want to start operating in the wedding industry a little bit of a trial see if it's something for them. Of course it is not a solution for everyone, and what conditions must be met and what to watch over - you can read about it below.
Unregistered activity is a form of business that does not require NIP, REGON, in some cases a cash register, or even a bank or accounting account. Such an entrepreneur does not have to pay ZUS, but, like everyone else, he has to pay taxes because it is a source of income.
For whom unregistered activity will work?
The type of business, its territorial scope or the number of customers is not important. However, pay attention to several aspects.
Undeclared activity can be established by any beginning entrepreneur if:
- in the last 60 months he did not conduct any activity,
- income from unregistered activities does not exceed 50% of the current minimum monthly wage (in 2021 it is 50% of PLN 2800, i.e. PLN 1400),
- acts personally as natural person (it cannot be a party in a civil partnership),
- carries out an activity not requiring concessions, permits, etc. (i.e., it won't work if you want to open a bar).
Economic activity - what does it mean?
To legally earn income, we should run a business. But this is not always the case. After all, when you receive remuneration on the basis of an employment contract, contract of mandate or contract for specific work, you do not need to have your own business - it is not an economic activity.
So when can we call our earning a business? It must have the following characteristics:
- must be organized,
- must have a commercial purpose,
- you have to act on your own behalf,
- Your actions must be continuous.
If so you want to be self-employed, but do not want to pay ZUS and register with CEIDG yet, because you don't know if your business will catch you, undeclared activity is for you.
However, you must bear in mind that Even if you conduct unregistered business, you are subject to the provisions of the Civil Code. Therefore, you must respect consumer rights, such as returning goods or complaints.
What is important, you can work on a contract for a job or a contract of mandate, and at the same time conduct unregistered activity.
What about bills and taxes?
This, unfortunately, when running a business, even unregistered, is inevitable because income earned in Poland is taxable. Although, thanks to the exemption from registering a company, topics such as bookkeeping and paying social insurance contributions do not apply to you, they still do you have to pay income tax.
However, when taxing, you cannot choose whether you want to settle your tax on a straight-line basis or on a lump-sum basis - the tax on unregistered activity is transferred only in the so-called tax scale 17 or 32%. What does this mean in practice?
It means that from unregistered activity you must include your income in your annual tax return (i.e. filling in PIT) and pay the taxthat will result from this settlement (as underpayment). You enter the revenues obtained from unregistered activity in the field "other sources". With the maximum use of this form of earning (equal to PLN 1400 every month), you must be ready for the fact that it will be a tax of up to PLN 2000. It is best to prepare for this in advance and set aside the necessary funds for this purpose every month.
Oczywiście you need to bill - but you don't need a cash register. You can get a so-called block. "proof of payment".
Taki the bill must contain: invoice number with the date of issue, first and last names or names of the seller and the buyer, the name of the service and the amount to be paid.
Thanks to the billing and careful monitoring of this topic, you will be able to keep watch over your finances and be aware in good time that you are approaching or have already exceeded your income limit.
Before you make up your mind thoughto conduct unregistered activities, make an appointment with an accountantwhich exactly will check your possibilities and whether you are not subject to any exclusions.
What if I exceed the revenue limit?
Well, then the matter is simple - you need to register a business. You have 7 days to register your company in CEIDGwhere you use the day when the income limit is exceeded as the start date. Therefore, de facto decisions on establishing a business you must take before you generate sales exceeding PLN 1400 per month.
Therefore, it is worth being aware that if, when exceeding the income of PLN 1400 per month, you do not register a business, or if you do not take into account all revenues by filling in your annual PIT or forging bills - you will break the law.
Remember that Polish law provides start-up relief and these are:
- TZW. "Start relief"i.e. no ZUS contributions for the first 6 months,
- small ZUS, i.e. lower premiums for the next 24 months.
And then you have nothing else to do but enjoy your own company and take care of its development 🙂 Good luck!