If an online seller earns over 3,225 PLN per month, they must register a business or company. Failure to comply with these regulations may result in fines and penalties.
The upcoming New Year may not be cheerful for those selling goods and services in the “gray market” through online platforms. Starting in January, these platforms will be required to report detailed transaction data and user information to tax authorities. The first reports will cover all transactions from 2023 and 2024. This results from new reporting regulations under the DAC7 Directive concerning online trade and rental activities. Tax offices will gain valuable information about taxpayers and their financial dealings. Informal entrepreneurs — including young people and parents supplementing their household income — could face severe penalties, including tax enforcement and bank account seizures, warns Natalia Stanowska-Potoczny, Partner at the law firm Causa Finita Szczepanek i Wspólnicy Spółka Komandytowa.
Regulations for Online Platforms
The new regulations primarily target those selling goods on platforms like Allegro, eBay, Amazon, and Vinted. Service providers such as hairdressers, repair specialists, transport, and construction workers using platforms like Fixly, Booksy, or OLX will also come under scrutiny. Additionally, landlords on Airbnb and Booking and drivers for Bolt and Uber will be affected. Allegro alone hosts 120,000 sellers, while Fixly lists over 450,000 service providers.
If sellers or service providers operate in an organized and continuous manner, earning over 3,225 PLN per month, they are legally required to register a business and pay taxes and social security (ZUS) contributions. In practice, many individuals have not registered, assuming that tax authorities would not track millions of listings or tie them to specific individuals. This situation could affect hundreds of thousands of people, impacting many Polish families, explains Natalia Stanowska-Potoczny.
Mandatory Data Reporting to Tax Authorities
Online platforms will soon submit sellers’ and service providers’ names, addresses, identification numbers, bank account numbers, and transaction details to tax authorities. Airbnb and Booking will also provide property registry numbers and the number of days properties were rented. Sellers and service providers will be fully exposed. Only those with fewer than 30 transactions per calendar year and total earnings not exceeding €2,000 are exempt from reporting.
Consequences for Informal Entrepreneurs
The new regulations spell trouble for informal entrepreneurs. If tax offices determine that a seller operated in an organized and continuous manner without the required registration, tax proceedings will be initiated. They will have to pay all overdue income tax plus interest, warns Natalia Stanowska-Potoczny.
Additionally, those who should have charged VAT (for example, selling car parts, cosmetics, electronics, or machinery) will owe back VAT payments plus a 30% penalty. They will also need to pay ZUS contributions plus interest for unpaid social security.
Severe Financial Penalties
The costs can be significant. For example, income tax on monthly sales of 10,000 PLN could amount to 23,000 PLN per year. VAT could add another 27,600 PLN, plus a 30% penalty. Unpaid ZUS contributions could total approximately 24,000 PLN per year. On top of these liabilities, the tax office and ZUS will add interest for late payments.
Although these new rules may surprise informal entrepreneurs, platforms are required to notify users about the data shared with tax authorities. This gives affected sellers some time to prepare a defense. It is almost certain that tax offices will initiate proceedings, but the timing of these actions is uncertain. It depends on how many cases arise and how many officials can be assigned to handle them.
Sellers can argue that their transactions were not organized or continuous, that items were not bought for resale, or that they were used goods. Consulting a lawyer is highly recommended. If a taxpayer’s explanation does not convince officials, a tax decision will be issued. Once finalized or given immediate enforceability, this could lead to tax enforcement, bank account seizures, and other consequences, warns Natalia Stanowska-Potoczny.
Source: Manager Plus
