VAT Exemption: New 240,000 PLN limit

The biggest change for small businesses is the increased VAT exemption threshold. From January 1, 2026, a company can generate revenue up to 240,000 PLN annually without VAT registration — previously the limit was 200,000 PLN.

What does this change?

Raising the threshold means more sole proprietorships and small companies can avoid VAT obligations, simplifying business operations and reducing bureaucracy. Additionally, taxpayers who earned between 200,000 and 240,000 PLN in 2025 can now continue working without VAT registration from 2026.

Who cannot use the exemption?

A list of activities excluded from the exemption still exists. If you run a law firm, medical practice, tax consulting, or financial services, you must register for VAT from day one, regardless of revenue.

Parameter	2025	2026	Change
VAT exemption limit	200,000 PLN	240,000 PLN	+40,000 PLN

Flat Rate Revenue Threshold

Flat rate is simplified taxation — instead of maintaining books, you pay a percentage of all revenue. In 2026, new limits apply, expressed in EUR.

New flat rate limits in 2026

Limit	2025	2026 (EUR)	2026 (PLN)	Change
Annual flat rate limit	8,569,000 PLN	2,000,000 EUR	8,517,200 PLN	-51,800 PLN
Quarterly settlements limit	856,920 PLN	200,000 EUR	851,720 PLN	-5,200 PLN

Important: EUR/PLN rates are calculated annually. In 2026, the average rate from October 1, 2025 is used: 1 EUR = 4.2586 PLN.

KPiR — Revenue Limit for Small Businesses

KPiR (simplified record keeping) is the simplest form of full accounting for small companies. After exceeding the revenue limit, registration in full accounting is mandatory.

New KPiR limit in 2026

Parameter	2025	2026 (EUR)	2026 (PLN)	Change
Revenue limit for KPiR	10,711,250 PLN	2,500,000 EUR	10,646,500 PLN	-64,750 PLN

After reaching 2,500,000 EUR (10,646,500 PLN) in revenue, you must switch to full accounting. This applies to PIT taxpayers calculating tax on a progressive scale or flat 19% tax.

PIT Brackets in 2026 — No Changes

Good news: tax brackets in 2026 remain exactly the same as in 2025. There was no increase in the tax-free amount or change in rates.

Current PIT brackets in 2026

Income bracket	Tax rate	Solidarity tax
Up to 120,000 PLN annually	12%	—
From 120,000 to 1,000,000 PLN	32%	—
Above 1,000,000 PLN	32%	4% on amount over 1M PLN

Tax-free amount and allowances

• Tax-free amount: 30,000 PLN annually (2,500 PLN monthly)
• Middle-class relief: up to 300 PLN monthly tax reduction (for income between 120,000-180,000 PLN annually)
• No changes: child allowances, pro-family relief, Internet relief

Cash-Basis PIT — New 2,000,000 PLN Limit

If you run a business, you can choose the cash-basis method — counting income and expenses when actually paid/received instead of invoice date. The 2026 limit increased significantly.

New cash-basis PIT limit

Parameter	2025	2026	Change
Revenue limit for cash-basis PIT	1,000,000 PLN	2,000,000 PLN	+1,000,000 PLN

More entrepreneurs can now use the cash-basis method — more natural for businesses based on actual payments rather than invoice dates.

Small CIT Taxpayers — 2,000,000 EUR Limit

Limited liability companies (LLCs) can qualify as small taxpayers if revenues stay below a certain threshold.

Small CIT taxpayer limit in 2026

Parameter	2025	2026 (EUR)	2026 (PLN)
Revenue limit (with sales)	8,569,000 PLN	2,000,000 EUR	8,517,200 PLN
De minimis amortization limit	200,000 PLN	50,000 EUR	213,000 PLN

Benefits of small taxpayer status

• One-time amortization write-off up to 213,000 PLN
• No requirement for additional revenue and cost books
• Simplified tax documentation

Company Vehicles — Cost Limits

The number of company vehicles whose costs can be deducted depends on CO₂ emissions. In 2026, a three-tier system applies.

Company vehicle limits in 2026

Vehicle type	Value limit	2026 (PLN)
Zero-emission vehicles (electric)	225,000 PLN	225,000 PLN
Emission below 50 g CO₂/km	150,000 PLN	150,000 PLN
Other passenger vehicles	100,000 PLN	100,000 PLN

The limit applies to the vehicle's initial cost. If you bought a car for 130,000 PLN, but the limit is 100,000 PLN, you can only deduct depreciation on 100,000 PLN.

FAQ: Frequently Asked Questions

Which limit affects my business?

Check your 2025 revenue and current 2026 figures. Compare them to VAT (240k), flat rate (2M EUR), KPiR (2.5M EUR), and cash-basis PIT (2M PLN) limits to see which applies.

Do I need to change my accounting method?

If you exceed your current method's limit, yes. Going from VAT exemption to VAT registration, or from KPiR to full accounting, requires notifying your tax office and implementing new procedures.

When do the 2026 limits take effect?

All limits became effective January 1, 2026. Adjustments made during 2025 are calculated using 2025 limits.