From 1 January 2026, an entrepreneur with their seat in Poland may not settle VAT if the value of their net sales did not exceed PLN 240,000 in the previous or current year. Previously the threshold was PLN 200,000. The exemption is not, however, available to everyone — some industries are excluded, and counting the limit itself has several traps worth knowing about before the first invoice.
What the turnover-based VAT exemption is
The exemption under art. 113 of the VAT Act applies to a person or a company, not to a specific service. An exempt taxpayer:
- does not add VAT to prices and does not file JPK_V7 files,
- does not deduct VAT from purchase invoices — tax paid to suppliers becomes a cost for them,
- issues invoices without tax, citing the legal basis of the exemption,
- does not have to file a VAT-R notification, though they may do so to appear in the register as an exempt taxpayer.
This is a solution for companies that sell mainly to private individuals or have few costs with VAT. The general rules of the tax are described in the article on VAT in Poland; below we focus only on the limit and its conditions.
How to count the PLN 240,000 limit
The value of sales without tax counts, cumulatively from the beginning of the year. The Act excludes several categories from it, so that real turnover may be higher than the limit itself. The limit does not include, among others:
- services and supplies subject to the subject-matter exemption under art. 43(1) (e.g. medical services, part of educational and financial services) — except transactions related to real estate, certain financial services and insurance services if they are not of an ancillary nature,
- sales of fixed assets and intangible assets subject to depreciation,
- intra-Community distance sales of goods not subject to taxation in Poland.
Example: a physiotherapist who earns PLN 200,000 from exempt treatments and PLN 60,000 from the sale of exercise equipment includes only PLN 60,000 towards the limit.
A company set up during the year
When starting during the year, the limit is converted proportionally to the period of activity. In practice it is counted by days. A company set up on 1 July 2026 operates 184 days that year, so its limit is PLN 240,000 × 184 / 365 ≈ PLN 120,986. Those who assume they will exceed this amount should register for VAT right away.
Who cannot use the exemption
Regardless of turnover, the exemption is not available to taxpayers who (art. 113(13)):
- provide legal, advisory (apart from agricultural advisory), jewellery or debt collection services, including factoring,
- supply goods from Annex 12 to the Act (e.g. precious metal products), excise goods (with exceptions, including for electricity, tobacco products and passenger cars used in the business as fixed assets), new means of transport, building land or buildings in specified cases,
- sell at a distance, e.g. through an online shop, cosmetics, computers and electronics, electrical equipment and machinery from PKWiU divisions 20.42.1, 26, 27 and 28,
- trade in parts and accessories for cars and motorcycles.
The most common problem concerns advisory. An entrepreneur who, alongside other services, offers advisory (e.g. business, marketing or implementation advice), loses the right to the exemption from the first such transaction — even if annual turnover is small.
Exceeding the limit — what exactly happens
The exemption ceases to apply from the transaction by which the limit amount was exceeded. That transaction is already subject to VAT (the way of settling it is worth agreeing with an accountant), and the company must file a VAT-R notification before the day the exemption is lost. In practice this means it is worth monitoring turnover each month and registering in advance when the threshold is a few thousand zlotys away.
- Checking cumulative turnover after each month.
- When the limit is approaching: filing VAT-R (before the day the exemption is lost).
- Changing the invoice template — the VAT rate, no annotation about the exemption.
- Information for regular clients about the new gross prices.
- The first JPK_V7 file for the period in which the obligation arose — by the 25th day of the following month.
After losing the exemption or voluntarily resigning from it, you can return to it only after one year, counting from the end of the year in which this happened.
Most common mistakes with the exemption
- Counting the limit from inflows into the account instead of from the value of sales — the moment is decided by the issue of the invoice or the performance of the service, not by payment.
- Overlooking the pro rata in the first year — a company set up in autumn has a limit much lower than PLN 240,000.
- Adding a service from the "blacklist" — a single invoice for advisory or sale of car parts removes the exemption, even at low turnover.
- No legal basis on the invoice — an exempt taxpayer should indicate the provision on which no VAT is charged.
- Import of services — buying advertising or software from a foreign company may trigger an obligation to settle VAT and register, even though the entrepreneur still uses the exemption on sales.
- VAT-R filed too late — notification after exceeding the limit means a period during which the business operated as an active taxpayer without registration.
Exemption or registration — how to decide
| Situation | Usually more favourable |
|---|---|
| clients are mainly private individuals | exemption — the gross price does not rise by 23% |
| clients are companies that deduct VAT | registration — VAT is neutral for them, and you deduct VAT on purchases |
| large purchases at the start (equipment, car, fittings) | registration — the possibility of recovering input VAT |
| services for foreign companies | depends on the type of services; VAT-UE registration is often needed |
Services for counterparties from other EU countries usually require VAT-UE registration even for an exempt taxpayer — details in the article on VAT-UE registration. The Act also provides a separate exemption for small companies with their seat in another EU state selling in Poland (art. 113a of the Act), with an annual turnover limit in the EU of EUR 100,000.
Obligations that remain despite the exemption
- Invoices and KSeF — exempt taxpayers also issue invoices in the National e-Invoicing System (KSeF); those whose invoiced sales do not exceed PLN 10,000 per month have until 1 January 2027.
- Cash register — exemption from VAT does not release from recording sales to private individuals on a cash register, if the separate limit for cash registers is exceeded.
- White list — an exempt company that filed VAT-R appears in the register with the status "exempt"; counterparties can check its bank account there.
How Good Balance will help
We monitor the turnover of clients using the exemption and warn in advance when the limit is approaching, and if necessary we file VAT-R and switch the settlements. Details in the offer of simplified accounting. We also help with issuing VAT invoices after registration.