1. Introduction — sole proprietorship (JDG) in 2026
A sole proprietorship (JDG — Jednoosobowa Działalność Gospodarcza) is the business form used by over 2.6 million entrepreneurs in Poland. In 2026, the rules are changing again — mandatory KSeF launches, health-insurance contributions are revised, and new VAT thresholds apply.
Each section links to detailed articles on our blog — over 80 texts written by practising accountants. To speak with one of them, call us:
2. Registering a JDG in CEIDG — step by step
Profil Zaufany / e-ID card — 5-minute setup
Home address = business address (or a separate one)
Choice of primary and additional PKD activity codes
Taxation form (can be changed by the 20th day after the first revenue)
VAT registration (active / exempt)
NIP number assigned immediately, REGON automatically
The CEIDG-1 application can be submitted online via Profil Zaufany (Trusted Profile) or an e-ID card. The whole procedure takes 15 minutes, and the business usually starts the next working day. Choosing the right PKD activity code matters — some codes exclude flat-rate taxation or the card tax.
Common mistake: selecting a primary PKD code that disqualifies you from flat-rate tax. Before choosing it, check the exclusion list in Art. 8 of the Flat-Rate Tax Act.
3. Choosing the taxation form — flat-rate, linear, progressive, IP Box
Progressive scale (12% / 32%) — best for low incomes (up to ~80 000 PLN/year) or large deductions (children, spouse).
Linear 19% — for high earners (above 240 000 PLN/year) with significant costs.
Flat-rate 2%/3%/5.5%/8.5%/12%/14%/15%/17% — simple when costs are low. Rate depends on PKWiU classification.
IP Box (5% PIT) — for programmers and intellectual property creators. Requires a KPWI register.
Card tax — being phased out, only for specific trades (barber, plumber, translator).
This is the single most important decision of your first year. The difference in taxes between a 'good' and a 'bad' choice is often 10 000–30 000 PLN per year. A brief overview:
4. ZUS (social insurance) contributions in 2026
Full ZUS ≈ 1 600 PLN/month (excluding health insurance)
Preferential small ZUS (24 months) ≈ 410 PLN/month
Start Relief (6 months) — 0 PLN ZUS, only health insurance
Small ZUS+ — proportional to revenue (up to 120 000 PLN/year)
ZUS holiday — 1 month per year without social contributions
Progressive / IP Box: 9% of income (min. approx. 415 PLN)
Linear: 4.9% of income (min. approx. 415 PLN)
Flat-rate: fixed amount based on revenue tier (3 tiers)
Approximate ZUS contributions in 2026:
Health insurance depends on the taxation form:
5. VAT — when you must, when you can avoid it
VAT 23% / 8% / 5% / 0% — standard rates
JPK_VAT — monthly file submitted to the MF
Split-payment mechanism for certain industries
VAT-OSS — mail-order sales within the EU
Reverse charge — construction services between VAT-registered businesses
The VAT exemption is available until revenue exceeds 240 000 PLN/year. Some sectors (advisory, jewellery, legal) cannot use the exemption. From 2026, mandatory KSeF changes how invoicing works.
6. Deductible business expenses — what you can write off
Equipment (laptop, monitor, camera) — full cost up to 10 000 PLN; above that — depreciation
Office / coworking / proportion of home use
Training, books, conferences, business travel
Advertising, marketing, hosting, domains
Accounting and legal services
A deductible cost is anything that serves to obtain, preserve, or secure a source of revenue. Most common examples:
7. Company car — leasing, deductible costs, flat rate
Operating lease — full instalment as a cost (cap: 150 000 PLN net value)
Lease buyout — can be recorded as a business cost
Mixed use (75% deductible, 50% VAT) — default
Exclusively for business (100% cost, 100% VAT) — requires mileage log and VAT-26 filing
Employee mileage reimbursement — 1.15 PLN/km for employee's own vehicle
A personal car in a JDG is one of the most tax-optimised areas. Options:
8. First employee — what you need to prepare
Employment contract / contract of mandate / contract for work / B2B — different costs and risks
Minimum wage 2026: 4 666 PLN gross
Employee contributions: ZUS + health insurance + PIT
Total employment cost: approx. 1.2 × gross salary
Annual leave: 20 or 26 days per year
PPK (Employee Capital Plans) — auto-enrolment
When hiring your first employee you must: register as a contribution payer (ZUS ZPA + ZUA within 7 days), sign a contract, arrange medical check-ups and H&S training, and maintain a working-time record.
9. Tax reliefs — IP Box, R&D, expansion
IP Box (5% PIT) — for income from qualified intellectual property rights (most commonly programmers)
R&D relief — additional 100% of R&D costs deductible
Expansion relief — overseas marketing costs × 2
Innovative employees relief — preference for R&D teams
Sports/culture sponsorship relief — 50% of cost as an expense + 50% deduction
The Polish tax system offers reliefs that can reduce your tax by tens of percent. Most commonly used by JDG owners:
10. Tax audit — how to prepare and what to do
7-day notice before the audit (not always mandatory)
Duration: up to 12 working days for a micro-business
Documents: everything from the last 5 years
Voluntary disclosure (czynny żal) — avoids penalties if submitted before an audit is initiated
Any business can be audited. In practice, the risk is higher when you: apply for VAT refunds, have many international transactions, use IP Box, or your data deviates from the industry average. Key facts:
11. When to switch from JDG to Sp. z o.o.
Liability limited to company assets
CIT 9% (small taxpayer) — often lower than linear PIT
Ability to retain profits in the company for reinvestment
Higher credibility in tenders and B2B contracts
Ability to bring in an investor / sell shares
A JDG has one major drawback: unlimited personal liability. With turnover above ~500 000 PLN/year or in high-risk sectors (construction, import e-commerce) it is worth considering a limited liability company (Sp. z o.o.). Benefits: