Polish entrepreneurs face new tax risks from labor inspections and car usage monitoring

Polish entrepreneurs are facing significant new tax challenges stemming from decisions by the National Labour Inspectorate (PIP). The PIP's reclassification of business-to-business (B2B) contracts as employment relationships can now trigger tax audits for up to six years retroactively.

Under these new circumstances, a company previously treated as a contractor may be forced to pay backdated personal income tax (PIT) advances and social security contributions. For the self-employed individual, this could mean owing the difference between the lower 19% flat PIT rate previously paid and the higher 32% progressive tax rate applicable to employment income.

Furthermore, tax authorities are intensifying their scrutiny of company car usage. They are now actively tracking personal travel during holidays, which could lead to tax implications and audits for businesses. The article also highlights other key issues for entrepreneurs, including the tax treatment of crime victims, the performance of the KSeF electronic invoicing system five months after its implementation, and a new deregulation package aimed at simplifying business operations.