Introduction
Unregistered activity is a specific form of economic activity that can be conducted by natural persons without the need to register a company. This is an attractive option for people who want to test their business idea or earn additional income. However, it should be remembered that even such activities should be conducted in accordance with applicable law.
Conditions for conducting unregistered business
To conduct unregistered activity, certain conditions must be met. Depending on the date, different income limits apply:
- Until June 30, 2023 – monthly revenues cannot exceed 50% of the minimum wage applicable in a given year.
- From July 1, 2023 – monthly revenues cannot exceed 75% of the minimum wage applicable in a given year.
Since from July 2023 the minimum wage increased to PLN 3,600, the monthly income threshold increased to PLN 2,700.
Additionally, a person running an unregistered business cannot have been registered as an entrepreneur in the last 60 months.
Unregistered activity and the cash register
In the case of unregistered activities, the sales value is limited by the revenue limit and is therefore low. Therefore, you can use the subjective exemption specified in Art. 113 of the VAT Act. However, there are types of activities that, regardless of the amount of revenue, require the use of a cash register. These include:
- repair of motor vehicles;
- vulcanization repairs;
- hairdressing, beauty and cosmetology services.
A person who decides to run an unregistered business in these areas will have to have a cash register and issue receipts. You must also have a cash register when selling goods or providing services to individual customers and flat-rate farmers.
Obligations of persons conducting unregistered activities
Persons conducting unregistered activities have several obligations that should be respected:
- Keeping records of income – everyone running an unregistered business should keep accurate records of their income. It can be conducted in a simplified way – in paper or electronic form, e.g. in a spreadsheet. There is no need to keep a tax book of income and expenses. The records do not need to be submitted to any office. It is only evidence in the event of a tax audit of your business
- Registration if the limit is exceeded – if monthly revenues exceed the established limit, such a person is obliged to register a business within 7 days of exceeding the limit.
- At the buyer’s request, invoices or bills must be issued
Taxation of unregistered activities
Income from unregistered activities is subject to taxation. Persons conducting such activities are obliged to pay personal income tax. It is settled in the PIT-36 declaration by April 30 of the year following the tax year. There is an additional “unregistered activity” section in which revenues, costs and income are reported.
Summary
Unregistered activity is an interesting form of running a small business, but it requires compliance with certain legal regulations. It is important to monitor your income and keep accurate records of income.
FAQ
To conduct unregistered activity, monthly revenues cannot exceed the established limit depending on the date: until June 30, 2023 – 50% of the minimum wage amount, from July 1, 2023 – 75% of the minimum wage amount. Additionally, you cannot have been registered as an entrepreneur in the last 60 months.
Yes, people running unregistered businesses are obliged to pay personal income tax.
Yes, people running unregistered businesses are obliged to keep records of their income.
In 2023, monthly revenues from unregistered activities cannot exceed: until June 30 – 50% of the minimum wage, from July 1 – 75% of the minimum wage.
