The latest draft amendment to the Polish Deal is a good direction, but the changes are insufficient. First of all, it is necessary to simplify the rules for calculating the company’s health insurance premium.
This is the result of a letter from accounting organisations and accounting offices as well as a group of tax advisers addressed to Prime Minister Mateusz Morawiecki. They are tired of all the changes.
“The Polish Deal has enormously complicated the rules of settling health insurance contributions with entrepreneurs. We encounter a lot of problems when calculating it”, says Aneta Lech, chairman of the Accounting Offices Committee at the Accountants Association in Poland, one of the signatories of the letter.
It is not difficult to make a mistake
In accordance with the, entrepreneurs calculate the premium on the income from activity on the scale and linear PIT.
Therefore, it has to be counted anew each month (previously it was in a fixed amount). In addition, contributory income is determined on a slightly different basis than tax (the February 9 amendment fixed several issues, but accountants emphasise that it did not remove all the discrepancies). It is not difficult to make a mistake, for example when accounting offices receive invoices from entrepreneurs late.
How to simplify it?
Entrepreneurs should be able to pay simplified contributions, i.e. in a fixed amount – propose the authors of the letter. The basis of the assessment would be income from two years ago. The compensation would be made on an annual basis. “This solution is already used when paying PIT advances and entrepreneurs will surely welcome it. It is also safe for the State Treasury” they emphasise.
The next suggestion concerns the correction of premiums. According to the , entrepreneurs have time for it only until the end of June of the following year.
“It’s definitely not enough. Entrepreneurs should have five years for corrections, which is as much as ZUS has to verify their settlements” accountants say. They add that the deadlines for applications for the reimbursement of overpaid contributions should also be extended. The new billing system means that there will be a lot of such overpayments. Entrepreneurs also have to pay a contribution for the months in which they have earned nothing.
This is especially true for those engaged in seasonal activities or performing long-term services and contracts, e.g. construction works. Therefore, the authors of the letter propose to introduce the same technique for calculating the premium as for PIT advances.
Too much for a family
Another thing: the premium paid by the entrepreneur for cooperating persons.
“It is usually the closest family that helps in running the company. They significantly increased their contributions, for unknown reasons. This in fact leads to a double contribution to the same income “says tax advisor Izabela Leśniewska, one of the signatories of the letter.
The draft amendment to the Polish Deal of March 24 reduces the premium of cooperating persons.
“It’s a good change, but not enough. The contribution needs to be reduced more or the rules for calculating it should be changed”, the letter emphasised.
Accountants and advisers also remind that the has banned deducting health insurance contributions from PIT. The draft of March 24 introduces the possibility of reducing the tax base, but this does not apply to entrepreneurs on a scale, and besides, others will deduct only part of the premium.
“Here, too, more decisive changes are needed, relieving the business”- says Izabela Leśniewska.
The authors of the letter also call for the introduction of the possibility of re-selecting the rules of corporate settlement. The changes proposed by the government, which are to be introduced on July 1 (mainly the PIT reduction to 12 percent), mean that for many entrepreneurs the earlier decision may turn out to be unfavourable.
“Re-election should be possible at the deadline for submitting the tax return for 2022, when the rules of taxation and contributions are finally known,” it says in the letter.
Postulates of IT specialists and clergy
PIT rate reduction, new tax reduction amount, end of middle class relief, deduction of health insurance contributions for some entrepreneurs – such changes were proposed in the draft amendment to the of March 24. The Ministry of Finance is currently analysing the comments submitted to it. There are quite a few of them, here are some examples.
Associations representing the ICT industry propose that on the occasion of the amendment, simplify and standardise the rules for qualifying IT services to individual lump sum rates. The Polish Chamber of Chemical Industry draws attention to the following obligations for employers. It is about informing new employees about how they can submit applications and declarations.
This means additional documents and procedures. The Employers’ Union “Polska Miedź” writes about unequal treatment of seniors. It follows from the amendment that the PIT exemption is to be granted only to those who have never taken a retirement pension. The Polish Bishops’ Conference proposes to restore the possibility of deducting health insurance contributions by clergy.