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

What is a non-registered activity?

A non-registered (or non-documented) activity is a small-scale gainful activity pursued by natural persons, which does not require registering a business. In order to pursue such an activity, you do not need to register it in CEIDG (Central Register and Information on Economic Activity).

Since January 2024, the maximum revenue for non-registered activities has been PLN 3181,5 per month, and as of July 2024 it will be PLN 3225 per month

A non-registered activity, even if it meets all the key conditions of a business activity, is not considered a business activity on condition that the revenue it generates does not exceed 75% of the minimum wage amount in any month.

A business activity is an activity:

• of organised character
• with a profit motive
• conducted continuously
• performed on your own account.

When can you pursue non-registered activity?

You can pursue a non-registered activity if:

• the monthly revenue from your activity does not exceed the 75% of the amount of minimum wage applicable in the year in question

The maximum revenue of a non-registered activity is PLN 3181,5 from January to June 2024. Since July 2024, it will be PLN 3225.

• you have not pursued a business activity in 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.

How to calculate the limit of your revenue in a non-registered activity?

The limit of revenue entitling to a non-registered activity includes the revenue receivable, even if it has not yet actually been received (i.e., the customer has not paid for the goods yet).

The limit does not include the value of returned goods, discounts and allowances granted (i.e., for example, discounts for early payment).

While calculating whether you have exceeded the limit entitling to non-registered activity, you should take into account the revenue from a given month (based on the bills or invoices issued):

• that you have already received
• that you will receive in the future in relation to sales you have realised or services you have provided.

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

Amounts received are those paid to you 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 provided the service and issued a sales document (bill, invoice), but the customer has not paid you yet.

Please note! For tax return purposes, the revenue should be calculated in a different way. In this case, your revenue from non-registered activity will be money and monetary values received or placed at your disposal as well as the value of benefits, both in kind and other free benefits received. This means that the taxable revenue from your non-registered activity only includes amounts paid by the customer for goods or services.

The amounts receivable yet not received in a given month will only become taxable after you have received the payment from your customer.

For tax return purposes, the revenue does not include the value of returned goods or discounts and allowances granted (for example, discounts for early payment).

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.

Example

Mariola embroiders tablecloths and sells them at fairs and on the internet. The revenue she achieves is around PLN 1,000 per month, thus Mariola does not need to register her activity, and she can pay taxes as a person conducting a non-registered activity.

Example

Marek sells small gadgets online, amounting to up to a dozen items per month. The selling price ranges from a dozen to several hundred PLN for a given gadget. In July 2023, Marek sold goods for a total amount of PLN 2,200, and in August 2023, for PLN 2,600. Marek could still realise the sales as a non-registered activity. In his annual tax return, he will also report as deductible costs the amounts (documented by bills) for which he purchased the commercial goods that he later sold.

What are the benefits of a non-registered activity?

You can benefit from a non-registered activity in the following ways:

• you do not need to register your activity in the register of entrepreneurs (CEIDG), in the tax office and in the Statistics Poland(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
• 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 the revenue from your non-registered activity does not exceed PLN 200,000 per year (unless you offer goods or services subject to VAT registration from the first sale)
• you do not have to maintain full accounting records; just simplified sales records.

What are the obligations of a person conducting a 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 consumer rights
• issue invoices or bills at the request of the buyer
• respect consumer rights, including the right to withdraw from a distance contract within 14 days; fulfil obligations related to complaints, returns or repairs.

Please note! By pursuing a non-registered activity, you are not an entrepreneur; therefore, pursuant to the Civil Code, the service contracts you conclude are contracts of mandate.

On these contracts, your principal pays the social security contributions to the Social Insurance Institution (ZUS) for you.

Read more about consumer rights.

Who can pursue a non-registered activity?

A non-registered activity can be pursued by a natural person only.

The provisions regulating the carrying out of a business activity and a non-registered activity do not specify any particular characteristics of such a person.

However, some limitations can result from the particular provisions regulating the status of a person who wants to pursue a non-registered activity.

It regards especially minors, the unemployed, civil servants, farmers and foreign nationals.

Foreign nationals

There are no provisions prohibiting or restricting foreign nationals who are lawfully residing in Poland from pursuing non-registered activities, as long as they meet the general conditions set out for such activities (the same that apply to Polish citizens).

Check out when foreign nationals can legally work in Poland (PL).

Important! Foreign nationals pursuing a non-registered activity must remember that the activity must be registered within 7 days after exceeding the monthly revenue limit. It means that at that moment they must hold a residence title or have a status that entitles them to set up a business in Poland.

Foreign nationals who at the moment of exceeding the monthly revenue limit do not hold a residence title or do not have the aforementioned status will not be able to follow the provisions and set up a business. Those foreign nationals must pay special attention to their sales records, monitoring them regularly so as not to exceed the limit.

Read more about the types of business activities that foreign nationals can pursue in Poland.

Remember! If a foreign national who is not a citizen of a European Union member state, a European Economic Area member state or Switzerland wants to provide services under a civil law contract (including a contract of mandate, a contract for specific work or an agency contract), they must attain:

• a work permit
• in the case of citizens of Armenia, Belarus, Georgia, Moldova or Ukraine - an entry of the declaration of entrusting work to a foreign national to the declarations register.

Ukrainian citizens are subject to simplified legalisation proceedings for the provision of services under a contract. It is sufficient for the service provider to notify the district employment office within 14 days.

Remember! The service provider (i.e. the entity to which services will be provided under a contract of mandate) is responsible for obtaining the relevant permit. However, a non-registered activity entirely limited to sales can be pursued without special permits.

Persons exempt from the obligation to hold a work permit in Poland (for example, holders of the Card of the Pole or full-time students in Poland) are not required to attain the aforementioned permit or declaration.

Minors

Minors may perform a 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 and 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 pursue a business activity within the meaning of the Act “Law on Entrepreneurs” yet obtains revenue. However, one of the conditions for having the unemployed person status is not being engaged in other gainful activity.

Other gainful activity means: “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 the aforementioned “other gainful activity”, thus losing 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, however, not in other cases.

Civil servants

The Act on Limitation of Conducting Business Activity by Persons Performing Public Functions does not lay down 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 specified in 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: the types of activities that fall outside the scope of the Act “Law on Entrepreneurs” may not be pursued by farmers as non-registered activities.

The provisions of the Act “Law on Entrepreneurs” are not applicable to:

• 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.

Read more about consumer rights.

When does an activity have to be registered?

Even if you expect small revenue, you are obliged to register the activity you want to pursue if it:

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

In these cases, an activity cannot be pursued without registration.

Examples of business activities that require a permit, concession or entry in the register of regulated activities include:

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

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

• insurance intermediation, including the performance of agency activities (pursuant to the Act on insurance intermediation)
• services of bookkeeping (pursuant to the Accounting Act).

Check out when an entrepreneur needs a permit, concession or entry in the register of regulated activities.

Non-registered activity and contracts of mandate

If you conduct a non-registered activity and you want to 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.

Remember! If you do not provide services but you sell goods (e.g. handmade products), then you are not obliged to pay social or health insurance contributions on such activity.

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 of mandate, you are not covered by mandatory insurance and the principal does not have to pay social insurance contributions for you.

How to pay your taxes to the tax office?

If you obtain revenue both from non-registered activity and 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 should report the revenue, costs, income and the amount of tax due.

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 includes money and monetary values received or placed at your disposal during the calendar year and the value of received benefits, both 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.

Carrying out a non-registered activity, you are not obliged to pay monthly tax advances. You pay taxes based on an annual return filed by 30 April for the previous year.

By this date, you must also pay the tax on revenue earned in your non-registered activity.

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

How to declare your revenue in a non-registered activity?

In the annal tax return, in which you pay taxes for pursuing a non-registered activity (PIT-36), you can report the costs you have incurred in relation to this activity and, thus, reduce your taxable income.

Such costs include, for instance, purchases of raw materials for the manufacture of products or the purchase of commercial goods that you sell, as well as the costs of energy consumed.

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. The deductible costs are recognised on a cash basis, i.e. on the date you actually incur the expense (make the payment).

Bills and invoices in a non-registered activity

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

• the consecutive number
• the date of issue
• details of the seller and the buyer
• the 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, you must issue an invoice upon your customer’s request. 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 provided the service or received all or part of the payment.

Your invoice must contain at least:

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

For sales which are a part of your non-registered 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. 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.

You can do this on paper or electronically, for example, in an Excel spreadsheet.

In the records, you record your sales for a given day, no 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. They usually include:

• the ordinal number
• the date of sale
• the turnover
• the cumulative turnover.

You can also add other information, such as the sales receipt number or information about the type of transaction. Examples of records:

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%.

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 after a tax year has begun, provided that the expected sales value does not exceed the amount determined as a proportion of PLN 200,000 to the portion of the year in which the activity is performed.

However, this VAT exemption will not be granted if:

• you sell:

  • goods listed in Annex 12 to the VAT Act (precious metals and precious metal scrap, jewellery)
  • goods subject to excise duty, with the exception of: electricity, tobacco products and passenger cars other than new cars, classified under income tax legislation as depreciable fixed assets
  • in certain cases: buildings, structures or parts thereof
  • building sites
  • new means of transport
  • wholesale and retail parts for motor vehicles and motorbikes

  • online goods 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 supply the following services:

  • legal
  • consultancy (except for agricultural consultancy)
  • jewellery
  • debt collection, including factoring
• you do not have your 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 who must pay VAT.

Non-registered activity and fiscal cash registers

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 20,000 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.

The obligation to have a cash register is independent of the fact of pursuing a registered business activity.

Therefore, even though in the case of a non-registered activity you are not in fact an entrepreneur (i.e. you do not register your activity in CEIDG), you are still obliged to have a cash register if:

• your sales amount exceeds PLN 20,000, or
• the goods sold or services provided by you are not exempt from being recorded on a cash register.

Read who cannot benefit from exemption from the obligation to record sales using a fiscal cash register (PL).

Check out the list of goods and services subject to the obligation of using cash registers in Article 4 of the Regulation of 24 November 2023 on the exemptions from the record-keeping obligation through the use of a cash register.

Controls of non-registered activity

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

Non-registered activity may be subject to control pursuant 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 particular 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 Personal Data Protection Office (UODO) in case of doubts and insufficient evidence.

Read more about the requirements that must be met before placing food products on the market.

Other types of activity that do not need to be registered

In addition to a 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 activity

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 activity. These include:

• 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 – the activity is conducted continuously
• performing the activity 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 pay taxes as a person conducting a business activity is particularly important for tax matters. Even if you think that you do not conduct a business, the tax authorities’ interpretation may differ. If you have doubts about whether or not you should pay taxes as a person conducting a business activity, contact the tax office.

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