Information and services website for entrepreneurs.

Non-registered activity and other situations when you do not need to register a business

Do you have a blog? Or maybe you prepare your own graphic design projects, manufacture own wine or occasionally sell things online? Read below to find out whether your activity falls under the provisions on non-registered activity or is not subject to registration.

When can you pursue a non-registered activity?

Business activity is an organised gainful activity, pursued in a continuous manner and on own account.

Non-registered activity, even if it meets the four conditions mentioned above, is not considered a business activity due to the low revenue it generates. Therefore, in order to pursue such activity you do not need to register it in CEIDG (Central Register and Information on Economic Activity).

Non-registered activity (non-registered or non-documented) is a small-scale gainful activity pursued by natural persons. In order to pursue such activity, you do not need to register a business.

You can pursue a non-registered activity if:

  • the revenue from your activity does not exceed PLN 1505 (50% of the minimum wage) in any month of 2022
  • you have not pursued a business activity within the last 60 months (5 years)

You can pursue a non-registered activity even if you do have a registered business but it has been suspended in the last 60 months. As a general rule, during the period of suspension a suspended business activity is considered as not operated.

The regulations specify one exemption from the requirement of not pursuing a business activity in the last 60 months. A natural person may pursue a non-registered activity even if they pursued business activity between 30 April 2013 and 29 April 2018, provided that:

  • they were not entered in CEIDG as a business owner between 30 April 2017 and 29 April 2018
  • their entry in CEIDG was removed before 30 April 2017

In practice, this means that if your business activity was conducted outside Poland, this has no impact on your right to pursue a non-registered activity in Poland.

Example

Janina registered her company in CEIDG and started her business in May 2013. In February 2017, she applied to have her business removed from CEIDG and moved to live in Germany She registered her business there in July 2017. In May 2018, she returned to Poland and decided to pursue a non-registered activity. This was possible because the business activity that she conducted within the preceding 60 months was conducted abroad and:

  • she removed her business from CEIDG before 30 April 2017
  • she was not entered in CEIDG between 30 April 2017 and 29 April 2018

Please note! You do have to register your business even if your revenues are to be small-scale but your planned activity:

  • requires a permit, a licence or an entry in the register of regulated activity
  • is defined in the legal provisions as a business activity within the meaning of the Act “Law on Entrepreneurs”.

In such cases the activity may not be pursued as a non-registered activity.

Examples of business activity for which it is required to obtain a permit, a licence or an entry in the register of regulated activity include:

  • security services concerning persons or property
  • sale of alcohol
  • organisation of tourist events
  • detective services
  • waste collection

Read about business activity for which a permit, a licence or an entry in the register of regulated activity is required..

Examples of activity defined as business activity within the meaning of the Act “Law on Entrepreneurs” include:

  • insurance intermediation, including agency activities (in accordance with the Act on distribution of insurance)
  • accounting services (in accordance with the Act on accounting)

Who can pursue a non-registered activity

Non-registered activity may be pursued only by a natural person. Provisions on business activity and non-registered activity do not specify any special characteristics to be met by such a person.

However, there may be some limitations which result from the specific (as defined in the legal provisions) status of the person who wishes to pursue a non-registered activity.

Minors

Minors may perform non-registered activity since this type of activity, as a general rule, does not require full capacity to perform acts in law.

However, when performing this type of activity minors need to remember of the limitations related to their age – persons aged 13-18 have limited capacity to perform acts in law. This means that they may not enter into legal transactions which result in a legal relationship being created, changed or terminated. Also, they may not, on their own, enter into agreements with their contractors for supply or sale of goods. In order to undertake obligations and dispose of their right they need a consent from their statutory representative, in most cases – a parent or a court-appointed guardian.

A minor may dispose of their income from a non-registered activity without a consent from their statutory representative, unless a family court decides otherwise, citing important reasons.

Important: Minor’s property is managed by their parents but they must obtain a consent from the child or the family court for any actions outside the ordinary management, such as purchase of a real property.

Non-registered activity of minors may be subject to limitations or be excluded if provisions specify that a specific type of business activity may be pursued only by adult persons. Such limitations or exclusion must be specified in a legal act governing such type of activity.

The unemployed

A person conducting non-registered activity does not perform business activity within the meaning of the Act “Law on Entrepreneurs” but obtains revenue. However, one of the conditions for having the unemployed person status is not being engaged in other gainful activity.

Other gainful activity is "performing work or providing services under civil law contracts, including agency contracts, contract of mandate, contract for specific work or contract for assistance in harvest work, within the meaning of the provisions on social insurance of farmers, or performing work while being a member of an agricultural production cooperative, farmers' circles cooperative or agricultural service cooperative".

Therefore, in order to maintain their status, an unemployed person may not conduct a non-registered activity under civil law contracts, including agency contracts, contracts of mandate, contracts for specific work or contracts for assistance in harvest work. Entering into a contract of such type would mean that the unemployed person performs “other gainful activity” and would lose their unemployed status.

In practice, if the activity of an unemployed person is based solely on sales contracts, the person may engage in a non-registered activity but not in other cases.

Civil servants

The Act on Limitation of Conducting Business Activity by Persons Performing Public Functions does not have its own definition of business activity and does not make reference to any other legal acts in this regard. Therefore, in the case of civil servants the definition of the Act “Law on Entrepreneurs” is applicable.

Non-registered activity is not considered to be a business activity due the low amount of revenue it generates. Therefore, it is not covered by the provisions of the Act on Limitation of Conducting Business Activity by Persons Performing Public Functions.

Consequently, a civil servant may engage in a non-registered activity.

It must be noted, however, that there may be internal rules or regulations of a given public administration body on additional gainful activity of its employees, requiring a consent for such activity from the general director of the public body, which may limit the possibility of pursuing a non-registered activity by a civil servant.

Farmers

As a general rule, natural persons who are farmers may pursue a non-registered activity. However, they are subject to additional restrictions: there are some types of activity that farmers may not pursue as a non-registered activity.

Those types of activity, in general, are the ones that are typical of the agricultural sector and as such they fall outside the scope of the Act “Law on Entrepreneurs”. They include:

  • agricultural production including growing of crops and animal husbandry, horticulture, growing of vegetables, forestry and inland fishing;
  • renting out rooms by farmers
  • sale of home-cooked meals and provision of other services related to the stay of tourists on agricultural farms
  • production of wine by producers that are farmers producing less than 100 hectolitres of wine per marketing year
  • farmers' sales activity referred to in Article 20(1c) of the Law of 26 July 1991 on personal income tax
  • activity carried out by circles of rural housewives.

To sum up, the type of activity that a farmer may pursue without registering a business is the one that does not fall within the scope of definition of agricultural activity and is a business activity within the meaning of the Act “Law on Entrepreneurs”. Such activity carried out by a flat-rate farmer or a farmer who is a regular VAT tax payer may qualify as a non-registered activity, provided that it meets the conditions laid down for such activity.

What are the benefits of non-registered activity?

  • you do not need to register your activity in the register of entrepreneurs (CEIDG), in the tax office and in the Central Statistical Office (GUS) since you will not need the tax identification (NIP) or statistical identification (REGON) numbers
  • you do not need to pay compulsory social security or health insurance contributions on your business profits
  • if you perform a contract for the provision of services or a contract of mandate, you are entitled to social security coverage as a contractor which means that the entity concluding the contract with you has the obligations of a payer of social insurance contributions and should remit them to the Social Insurance Institution (ZUS).
  • you do not have to pay monthly (or quarterly) tax advances
  • you do not have to pay VAT – you are covered by a personal exemption, because your revenue from your non-registered activity will not attain the threshold of PLN 200,000 per year
  • you do not have to maintain full accounting records, just simplified sales records.

What are the obligations of a person conducting non-registered activity

From the moment of starting a non-registered activity, you have the obligation to:

  • keep simplified sales records
  • declare your revenues from non-registered activity (after deducting costs) in the annual PIT-36 return, according to the tax scale
  • respect the rights of consumers
  • issue invoices or bills at the request of the buyer.

Even though the activity you conduct is non-registered, you are still an "entrepreneur" under the provisions of the Polish civil law. This means that you are considered as an entrepreneur in your relations with consumers and you have obligation of responding to complaints, giving refunds or repairs. This also applies to the consumer's right of withdrawal from a distance contract within 14 days.

Read more about what rights consumers have.

How to calculate if your earnings are below the limit

Whether or not you can run a non-registered activity is determined by the amount of your monthly income from the activity - in any month you cannot exceed 50% of the minimum wage.

To see if your monthly earnings are within this limit, you need to consider all amounts received and receivable from selling your goods or services.

The revenue does not include the value of goods that have been returned to you for a refund, as well as discounts and rebates (i.e. discounts for making payments before the due date).

In order to determine your revenue you need to keep records of your sales.

Amounts received are those received at the time of sale or before the sale (the so-called advances).

Amounts receivable are those that you have not yet received at the time of sale – you have sold the goods or performed the service and issued a sales document (bill, invoice), but the customer has not paid you yet.

Please note! If you exceed your monthly limit of revenue, your activity will be considered a business activity. Once the limit is exceeded, you have 7 days to register your business in CEIDG. Remember that as a new entrepreneur you may be entitled to a relief on social insurance contributions.

Read more about:

Non-registered activity and contract of mandate

If you conduct a non-registered activity and at the same time provide services under a contract for the provision of services or a contract of mandate, then you are entitled to social insurance coverage as a contractor. The entity concluding such a contract with you (the principal) then has the obligations of a payer of social insurance contributions and is obliged to report the contract within 7 days to social security and/or health insurance and pay social insurance contributions.

There are, however, exceptions to this rule. For example, if you are a student who is under the age of 26 and you perform a contract, you are not covered by mandatory insurance and the principal does not have to pay social insurance contributions for you.

Remember: If you do not provide services but you sell handmade products, for example figurines or ornaments, then you are not obliged to pay social or health insurance contributions in connection with such activity (since you do not provide work and do not conduct non-agricultural business activity either).

Bills and invoices in non-registered activity

At the request of your customer, the buyer, you are obliged to issue a bill to your customer. The bill should include at least:

  • consecutive number
  • date of issue
  • details of the seller and the buyer
  • name of the service provided
  • the amount to be paid.

When conducting a non-registered activity, you are exempt from the obligation to issue invoices. However, if your client so requests, then you must issue an invoice. Such a request can be made by the customer within 3 months of the end of the month in which you delivered the goods or the service or received all or part of the payment. Your invoice must contain at least:

  • date of issue
  • consecutive number
  • first and last names or business names and addresses of the taxable person and of the person buying the goods or services;
  • name (type) of goods or service
  • measure and quantity (number) of goods delivered or scope of services rendered
  • unit price of goods or services
  • total amount of receivables.

For sales which is a part of your unregistered activity, you only have to enter your first and last name on the bill or invoice - you do not need to provide your PESEL number or address of residence.

What should records of sales contain

If you pursue a non-registered activity, you should keep simplified sales records. You can do this on paper or electronically, for example, in an Excel spreadsheet. Keeping accurate records of your sales will help you quickly determine whether or not you have exceeded the threshold of revenue which entitles you to conduct a non-registered activity.

In the records, you record your sales for a given day, not later than before making a sale on the next day. This means that you should not enter the previous day's sales after you sell a product or service the next day. The legislation does not regulate exactly what elements should be included in the simplified sales records. It usually contains:

  • consecutive number of a record
  • date of sale
  • value of sales
  • value of sales cumulatively.

You can also add other information in the records – the number of the sales document or information about the type of transaction. Examples of records:

Cons. no.

Date of sale

Sales amount

Sales amount cumulatively from the beginning of the year

1.

2.01.2018

300.00

300.00

2.

4.01.2018

150.00

450.00

Please note! If your records are kept in an unreliable manner or are not kept at all, and it is not possible to determine the value of the sales on the basis of these records, the tax authority will determine the taxable value of the sales and calculate the amount of tax due. If it is not possible to determine the type of taxable goods or services, the amount of tax will be set at 22%.

How to declare your revenue and pay your taxes to the tax office

If you obtain revenue both from non-registered activity as well as from an employment contract or contracts of mandate or contracts for a specific task, you must declare your revenue from non-registered activity in the annual tax return PIT-36. There is an additional heading "non-registered activity" in which you will report the revenue, costs, income and the amount of tax due.

Please note! You calculate the amount of revenue for income tax purposes differently than the amount of revenue for the purpose of verifying if you are within the limit specified for non-registered activity.

For the purpose of dealings with the tax office, your revenue from non-registered activity is money and monetary values received or placed at your disposal during the calendar year and the value of received benefits: benefits in kind and other free benefits.

This means that your taxable revenue from this activity is only the assets actually received or put at your disposal, that is, the amounts paid by the customers for goods or services.

In your annual tax return, you can deduct costs that you have incurred in connection with your activity, for example, the purchase of raw materials for the production of your products. These costs should be documented, so keep all proofs of purchase. It is best if a proof of purchase states your first and last name and place of residence.

Please note! Obtaining revenue from non-registered activity does not exclude the right to file a joint tax return by spouses.

You do not have to pay tax advances.

Important: You can earn revenue from rendering services personally under contracts of mandate or contracts for specific work to the same extent as from non-registered activity. Revenue from non-registered activity is separate to revenue from contracts of mandate or contracts for specific work and it should not be counted together.

Non-registered activity and VAT

Taxpayers who conduct a small-scale activity, including a non-registered activity, very often benefit from VAT exemption, because their sales in the preceding tax year do not exceed PLN 200,000.

Please note! The exemption also applies to taxpayers who start their activity during a tax year, if the expected sales value does not exceed the amount determined as a proportion of PLN 200 thousand to the portion of the year in which you performed the activity.

However, this exemption will not be granted if:

  • you sell:

    • goods listed in Annex 12 to the VAT Act (precious metals and scrap of precious metals, jewellery)
    • goods subject to excise duty, with the exception of: electricity, tobacco products and passenger cars (other than new cars) which are classified, under the provisions of the income tax law, as fixed assets subject to depreciation
    • in some cases: buildings, structures or parts thereof
    • construction land
    • new means of transport
    • goods through the Internet, such as:

      • cosmetic and toilet preparations
      • computers, electronic and optical products
      • electrical appliances and non-electrical household appliances
      • machinery and equipment n.e.c.
    • you conduct wholesale and retail sale of parts for:

      • motor vehicles
      • motorcycles
  • you provide the following services:

    • legal services
    • advisory services (with the exception of agricultural advisory services)
    • jewellery-related services
    • debt collection, including factoring
  • you do not have a registered office in Poland.

If your activity involves such goods or services, you must register as an active VAT payer regardless of the value of your sales and become a VAT payer, with all the resulting consequences. For example, you are required to obtain a tax identification number (NIP) and keep records of all your business sales and purchases.

Read about who has to pay VAT.

Non-registered activity and fiscal cash register

Taxpayers whose turnover achieved from sales to natural persons not conducting business activity and to flat-rate farmers did not exceed PLN 20,000 in the previous tax year do not have to record sales transactions in a cash register. If you started such activity in the previous year, your turnover may not exceed the amount determined as a proportion of PLN 20 thousand to the portion of the year in which you performed the activity.

This principle also applies to non-registered activity.

However, you will need a cash register if you sell goods or services for which the use of fiscal cash registers for sales recording is obligatory.

These include, but are not limited, to the following: liquefied petroleum gas, parts for internal combustion engines, bodies for motor vehicles, radio, television and telecommunications equipment, perfumes and eau de toilettes, as well as the following services: transport of passengers and their hand luggage by taxis, repair of motor vehicles and motorbikes, tax consultancy, services of restaurants and other non-mobile food service activities, including the seasonal ones, hairdressing, cosmetic and cosmetology services.

If you sell these goods or services, you must record sales using a fiscal cash register, regardless of the turnover.

Read more about:

Controls of non-registered activity

Just because you do not have to register in CEIDG does not mean that you will not have to deal with official controls.

Firstly, non-registered activity may be subject to control under the VAT Act and the Tax Ordinance.

Even if a non-registered activity is exempt from VAT (which it does not have to be – it depends on the activity), the person conducting the activity has the obligation to record sales. The records, among other things, can prove that the VAT exemption is correct. The records themselves may be checked by tax authorities.

In addition, a person engaged in a non-registered activity may be subject to controls to verify the type of activity conducted and the manner of conducting it. For example, food production may be subject to checks by the State Sanitary Inspection.

If you pursue a non-registered activity, you have to comply with the provisions on consumer rights and the GDPR. If there are any proceedings initiated against you for their violation, an inspection may be carried out by the Office of Competition and Consumer Protection (Polish: UOKiK) or the National Data Protection Authority (UODO) in case of doubts and insufficient evidence.

Read:

Other types of activity that do not require registration

In addition to non-registered activity, legal regulations specify certain types of activity that do not need to be registered in the business register (CEIDG). This applies to:

  • agritourism activity of farmers
  • wine production by farmers
  • agricultural retail trade.

Agritourism

This activity includes renting out rooms by farmers, sale of home-cooked meals and provision of other services related to the stay of tourists on agricultural farms.

Wine production

The activity consisting of wine production by producers who are farmers does not need to be registered, provided that the volume is less than 100 hectolitres of wine per marketing year. This means that a farmer producing less than 100 hectolitres of wine per marketing year does not have to register a business activity.

The owner of a vineyard who intends to produce wine to place it on the market needs to make an entry in the register of producers.

Direct sales of farm products (agricultural retail trade)

The sales of plant and animal products processed in a manner other than industrial processing (with the exception of processed plant and animal products coming from special sectors of agricultural production and products subject to excise duty) does not need to be registered, provided that:

  • processing of plant and animal products and their sale does not take place by employing other people on the basis of employment contracts, contracts of mandate, contracts for specific work and other contracts of a similar nature, excluding slaughtering of slaughter animals and post-mortem processing of these animals, including cutting, splitting and grading of meat, milling of cereals, pressing of oil or juice and sale during exhibitions, festivals, markets and fairs
  • sales records are kept
  • the quantity of plant or animal products originating from own crop cultivation or animal breeding used in manufacturing of a given product accounts for at least 50% of that product, excluding water.

What are the defining characteristics of a business

If you are wondering whether you can define your current activity as a business activity and whether you should register it as such, check whether it has the characteristics of a business. These are:

  • profit motive – the activity is profit-oriented
  • organised character – the activity is organized, for example, you rent a space to conduct the activity, search for customers, engage in marketing efforts
  • continuity – means that you conduct the activity continuously
  • performing it on your own account and on your own responsibility (i.e. you do not perform it on behalf of someone else and under their direction)
  • bearing the economic risks associated with the activity.

Important: There are several definitions of a business activity and of an entrepreneur in the regulations. This means that even if you do not fall under the definition of a business activity or entrepreneur in one act of law, you may be subject to the provisions of other regulations (for example, tax or social insurance act). An example may be the definition of an entrepreneur in social insurance regulations. According to these regulations, a shareholder of a general partnership is subject to the same social insurance rules as an entrepreneur, although he or she is not an entrepreneur in the light of other regulations (it is the general partnership itself that has the entrepreneur status, not its partners).

Deciding whether you should register and operate your activity as a business activity is particularly important for tax matters. Even if you think that you do not conduct a business, the tax authorities may have a different opinion. If you have doubts about whether or not you should pay taxes as a person conducting business activity, contact the tax office.

You can apply for an individual tax ruling.

More detailed information about non-registered activity can be found in the brochure provided by the Ministry of Development: Non-registered activity in a nutshell

The portal is supervised by the Ministry of Economic Development and Technology. Project partners: Łukasiewicz - Poznań Institute of Technology, Polish Chamber of Commerce. The project is co-financed from the Digital Poland Programme by the European Union from the European Regional Development Fund and is a continuation of the project \"Central Register and Information on Economic Activity\" financed from the Innovative Economy Programme and the project \"Simplification and digitization of procedures\" financed from the Human Capital Programme.

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