Poland's tax authority allows simple flat tax for short-term rentals, no changes planned

Owners of short-term rental properties in Poland can continue to use a simplified flat tax system for their income, according to the Ministry of Finance. This ruling applies even to properties rented out on a daily or weekly basis, often referred to as short-term rentals.

The tax authority has confirmed that property owners are not required to register a business to declare these earnings. They can opt for a flat tax rate of 8.5%, which increases to 12.5% for annual income exceeding 100,000 Polish złoty (approximately $25,000 USD).

This confirmation comes as a relief to many property owners who were concerned about potential changes. A recent amendment to the law on hotel services introduced a new definition that includes short-term rentals of apartments for a few days. This led to fears that such income might be reclassified as business activity, requiring owners to register a company and pay social security and health insurance contributions, in addition to more complex tax filings.

However, the Ministry of Finance clarified that the fundamental principle remains: income from private rentals is taxed privately. This stance aligns with previous interpretations by the Supreme Administrative Court, which has upheld the right of individuals to use the private rental tax regime. The ministry's confirmation ensures that the current, simpler tax process will continue for short-term rental income.