Change of Taxation Method for 2026 – Deadlines and Key Rules

Paweł Gorzelec
Dec 31, 2025
3 min read

The beginning of a new tax year is an appropriate moment for entrepreneurs to review their existing tax arrangements. For individuals conducting sole proprietorships, one of the most important decisions concerns the selection of the personal income taxation method. This decision should take into account not only the applicable tax rate, but also the rules for determining the tax base, the calculation of health insurance contributions, and access to tax reliefs and preferences.

When selecting a taxation method for 2026, compliance with statutory deadlines is of particular importance, as failure to meet them results in the inability to change the taxation method for the given tax year.

Available taxation methods in 2026

In 2026, sole proprietors may choose one of the following taxation methods:

taxation according to the progressive tax scale (general rules),
flat-rate income tax,
lump-sum tax on recorded revenues.

Each of these options entails different tax and contribution consequences.

Progressive tax scale (general rules)

Under the progressive tax scale, income is taxed at the following rates:

12% – up to PLN 120,000 of annual income,
32% – on the surplus exceeding PLN 120,000.

This taxation method includes a tax-free allowance of PLN 30,000. Consequently, no personal income tax is due if the taxpayer’s income does not exceed this amount.

Entrepreneurs taxed under the progressive scale are subject to a health insurance contribution of 9% of income. This contribution is not deductible from either income or tax.

An important advantage of this taxation method is the ability to benefit from statutory tax reliefs and to file jointly with a spouse. As a result, the progressive tax scale may be beneficial for taxpayers with moderate income levels or those making use of tax preferences.

Flat-rate income tax

The flat-rate income tax applies a uniform tax rate of 19%, regardless of the level of income earned. Under this method, the tax-free allowance does not apply, and the tax obligation arises from the first unit of income.

The health insurance contribution amounts to 4.9% of income and may be partially deductible, subject to statutory limits.

This taxation method is most commonly chosen by taxpayers earning higher income who wish to avoid progressive tax rates. However, it should be noted that the flat-rate income tax excludes the possibility of joint filing with a spouse and limits access to certain tax reliefs.

Lump-sum tax on recorded revenues

Under the lump-sum tax regime, tax is calculated on revenue, without deducting the costs of earning that revenue. The applicable tax rate depends on the type of business activity conducted and varies depending on the nature of the services provided or goods sold.

Health insurance contributions under this method are paid in fixed amounts determined by annual revenue thresholds set out in statutory regulations.

The lump-sum tax may be advantageous for businesses with low operating costs and high margins. However, a detailed analysis of the taxpayer’s business profile is essential before choosing this taxation method.

Deadline for changing the taxation method for 2026

A change of the taxation method for a new tax year may be made by the 20th day of the month following the month in which the taxpayer earns their first revenue in the given tax year.

As a rule, where the first revenue is earned in January, the deadline for changing the taxation method is 20 February 2026.

If no revenue is earned at the beginning of the year, the deadline is postponed accordingly and depends on the month in which the first revenue is obtained.

Example: If the first revenue is earned in March 2026, the taxpayer may select the taxation method by 20 April 2026.

Special attention should be paid to situations where the first revenue is earned in December. In such cases, the taxation method must be selected by the end of the tax year, i.e. by 31 December 2026.

Consequences of missing the deadline

The deadline for notifying a change in the taxation method is a substantive law deadline and cannot be restored. This means that submitting the notification even one day late results in the inability to change the taxation method for the given tax year.

In such circumstances, the taxpayer will continue to be taxed according to the rules applicable in the previous tax year.

How to notify a change of taxation method

A change in the taxation method may be notified in one of the following ways:

by updating the entry in the Central Registration and Information on Business (CEIDG), which is the recommended solution and is equivalent to notifying the competent tax office,
by submitting a written statement to the competent head of the tax office.

If the taxpayer does not intend to change the taxation method, no notification is required. In such a case, taxation in 2026 will continue under the rules applicable in 2025.