The small ZUS Plus is entitled to entrepreneurs in five-year cycles – 3 years of preferential contribution and 2 years break for a big ZUS, not 3 years of break as hitherto claimed by the Social Insurance Institution. That’s what the District Court in Gorzów Wielkopolski ruled on June 27, 2024.
Small ZUS Plus after 2 years of big ZUS
This verdict means that entrepreneurs whose income in the previous calendar year did not exceed 120,000 PLN (plus meeting other conditions), can now return to the Small ZUS Plus after only 2 years of paying the standard insurance premium (so-called big ZUS), which is close to 2000 PLN currently. However, until June 30, 2024, the Small ZUS Plus rate was only 402.65 PLN, and will increase by almost 6 PLN to 408.16 PLN from July 1st (not forgetting that entrepreneurs must also add health insurance contributions to the aforementioned social insurance contributions).
Dispute between the SME spokesperson and ZUS
The verdict was announced on its website by the Spokesperson for Small and Medium-Sized Enterprises, who has been in dispute with ZUS for many months. The institution held that entrepreneurs who used the Small ZUS Plus from January 2019 to December 2021 (the first period of this new preference) must wait 3 years to use it again. Based on this interpretation of the regulations, it issued many unfavorable decisions for entrepreneurs, denying them the right to Small ZUS. The SME spokesperson, who filed hundreds of appeals against such decisions, argued that the legislator’s intention was to grant them relief for 36 months in cyclical 5-year periods. The court has now confirmed the spokesperson’s position.
Small ZUS conditions
The reason for the unfavorable position of ZUS was a different interpretation of the regulations of para. 11 point 6 art. 18c of the Act of October 13, 1998 on the social insurance system. According to its par. 1 and 2, the basis for the assessment of pension and disability insurance contributions for an entrepreneur conducting non-agricultural business activity, whose annual income from this activity obtained in the previous calendar year did not exceed the amount of 120,000 PLN, is dependent on the income from this activity, obtained in the previous calendar year, and cannot exceed 60% of the forecasted average salary, nor be lower than 30% of the minimum wage. The provisions do not prohibit such an entrepreneur from resigning from the preference and paying higher contributions.
Small ZUS when it does not apply?
In par. 11 the legislator indicated exclusions, prerequisites when entrepreneurs cannot take advantage of this relief if: 1) in the previous calendar year they settled with a tax card and were exempt from VAT, 2) they are starting a business (because these benefit from Small ZUS for the first 24 months for new companies), 3) if in the previous year they conducted business for less than 60 calendar days, 4) also when in the previous year they conducted activities: creators and artists, in a free profession, were partners of a one-man limited liability company, a civil partnership, a limited partnership or a professional partnership, shareholders of a simple joint-stock company contributing to the company, whose subject is the provision of work or services, general partners in a limited joint-stock partnership, or a public or non-public school or preschool education facility or their team, 5) they conduct activity within the framework of B2B for a former employer.
In point 6, the legislator included that Small ZUS Plus doesn’t apply to entrepreneurs who enjoyed this preference for 36 calendar months during the last 60 calendar months of running non-agricultural business. To understand ZUS’s reasoning, one must remember that this is the so-called negative premise, and thus fulfilling its conditions deprives the insured of the right to Small ZUS.
ZUS exploited the unfortunate wording of the regulation
One can apply for Small ZUS Plus until January 31 each year. The Social Insurance Institution accepted the interpretation that if someone in January 2024 wanted to reapply for Small ZUS after 2 years of paying big ZUS, they look back at a full 60 calendar months, i.e. from January 2019 to December 2023. And in this 60-month period, the entrepreneur enjoyed 36 months of small ZUS Plus, and therefore the negative premise to benefit from this insurance preference was met. The Social Insurance Institution exploited the unfortunately constructed wording of this provision. It therefore took the position that such an entrepreneur will be able to try to return to the Small ZUS in the next session, i.e. by registering by the end of January of the following, 2025 year (one cannot register in other months, so if they didn’t register in January 2024 the next opportunity will be in January 2025). Only then, by “looking” backwards, the insured will be able to say that in the last 60 months they didn’t use Small ZUS for 36 months.
Spokesperson and court in defense of rationality and entrepreneurs
Both the SME spokesperson and the court in Gorzów, which supported his position, declared ZUS’s interpretation as irrational. The legislature’s idea was to give small enterprises (annual income limit 120,000 PLN) the chance to pay lower social insurance contributions for 3 years in a 5-year period. Simply put. As the SME spokesperson stated, he will refer to the verdict of June 27 in already ongoing court proceedings.
Am I entitled to Small ZUS?
Based on the justification of the verdict of the court in Gorzów, people whom ZUS denied registration for Small ZUS, and who submitted applications for such registration by the end of January 2024, will be able to effectively fight the insurance institution. Considering the huge differences in contribution amounts, as an entrepreneur it’s worth checking at every stage of conducting business whether one is entitled to Small ZUS Plus. During consultations with the accounting office, you can also ask about the possibility of benefiting from other preferences, and for help in solving other problems arising from the implementation of ZUS obligations.
Author: Robert Nogacki, legal advisor, managing partner, Skarbiec Law Firm, specializing in legal, tax and strategic advice for entrepreneurs
Source: https://ceo.com.pl/przedsiebiorcy-moga-wrocic-na-maly-zus-plus-juz-po-2-latach-przerwy-nie-3-jak-twierdzil-zus-42017
