Why 14 companies from Łódź changed their taxation form in March
In March 2024, exactly 14 entrepreneurs from Łódź, from car workshop owners to IT companies with offices on Off Piotrkowska, signed new powers of attorney with us. We changed their tax model because the existing rules simply stopped adding up in the home budget. Simply put, these companies were overpaying because no one had calculated the benefits of the new interpretations of EU regulations for them.
The trap of the 19% flat tax
For years, the flat tax was the standard for anyone who crossed the first threshold of the scale. However, after recent reforms, the real burden increased by the health insurance contribution, which can no longer be fully deducted. In March 2024, we sat down with a client from the transport industry in Łódź who generated 42,000 PLN in monthly revenue. After deducting fuel and leasing installments, his real tax with levies was almost 26%. That is absurdly high.
Simply put, we advised him to switch to a 8.5% lump sum. Thanks to this, his monthly burdens fell by 2,134 PLN. Over a year, that's over 25,000 PLN that stayed in his private account. We count every penny because we know how hard it is to earn that money in the Łódź market. According to the letter of the law, such shifts are fully safe, provided that the PKWiU codes are classified correctly, which we checked twice before sending the application to the office.
Most companies in Łódź overpay by 2,134 PLN per month just because no one calculated the lump sum for them after the changes in regulations.
Why was March the deadline?
Although the form of taxation is usually chosen by the 20th day of the month following the month in which the first revenue was achieved, March was specific due to new interpretations regarding private rental and business activity. At Horyzont Finansowy, we noticed that 14 of our clients could benefit from a retroactive correction or prepare for a change of form from the next period, which blocked the cash leak.
Our team, consisting of 14 people in the office at Piotrkowska Street, had to act quickly. The average response time to a client's query during that period was 47 minutes. We don't play around with theorizing. We take the accounting history from the last 3 quarters, throw it into our analytical sheet, and show: here you lose, here you gain. If the difference is less than 400 PLN, we say openly that the change is not worth the trouble due to administrative costs.
Estonian CIT for the ambitious from Łódź
Among these 14 companies were two manufacturing entities from the Teofilów area. For them, the lump sum was unfavorable due to large purchases of raw materials. Here, the solution turned out to be Estonian CIT. This allowed these companies to avoid paying tax on profit for the year 2023, because the entire surplus was allocated to the purchase of new metalworking machines. Concrete results, not promises – the company saved 84,300 PLN at once on income tax alone.
However, implementing Estonian CIT requires discipline. You have to watch out for so-called hidden profits and expenses unrelated to the business. Our role was to train the owners in 3 hours on how to describe representation invoices so that the office would have nothing to complain about. Since then, meaning for 11 months, none of these companies have had problems with tax audits. According to the letter of the law, investing profit is the best tax shield.
By switching to Estonian CIT, one of the manufacturing companies from Teofilów kept 84,300 PLN for investments instead of giving it to the office.
How to check if you are overpaying?
You don't have to take our word for it. You can check it yourself, but rarely does anyone have time to analyze 200 pages of new regulations per year. Since September 2016, we have helped 487 clients get back on track with their taxes. Our statistics are clear: 87% of companies that contacted us last year had a poorly chosen taxation form for their real costs. We don't look for innovative solutions where simple addition and subtraction are enough.
We invite you to our office at Piotrkowska 104. We can agree on a specific time, e.g., Wednesday at 2:00 PM, and in 40 minutes we will review your last KPiR summary. If we can save you at least 500 PLN per month, we will tell you straight. If your current settlement is optimal, you will hear that too. We don't push for changes you don't need. We count every penny, yours and ours.
