🔹 Introduction

 Not every entrepreneur has to be a VAT taxpayer right away. In Poland, there is a so-called subjective VAT exemption – meaning you can run a business without registering as a VAT payer, if your annual turnover does not exceed 200,000 PLN. This solution is particularly beneficial for beginner sole proprietors and freelancers.
 

🔸 1. What is the 200,000 PLN limit?

 According to Article 113 of the VAT Act, an entrepreneur can benefit from VAT exemption if their sales to individuals and businesses do not exceed 200,000 PLN gross annually.

📌 This exemption is voluntary – you can give it up at any time.
 

🔸 2. Who can benefit from the exemption?

The VAT exemption applies if:
✅ Your gross turnover from business does not exceed 200,000 PLN in a given year,
✅ You do not provide services or sell goods that by law must be subjected to VAT (list of exceptions below),
✅ You conduct your business on the territory of Poland and do not primarily sell to the EU or outside the EU.
 

🔸 3. How to calculate the limit?

For the limit, you include the gross sales value (i.e., with tax, even if you are not formally charging it), excluding:

• sales of fixed assets (e.g., sale of an old company laptop),
• intra-community supply of goods, export, import of services,
• transactions not subject to VAT taxation in Poland.

📌 The limit applies to the entire company – not just one service or ancillary activity.
 

🔸 4. Proportional exemption when starting business during the year

If you start your business, e.g., on June 1, the limit is calculated proportionally:
 200,000 PLN × (number of days until the end of the year / 365)

📌 Example: start June 1 = 214 days → 200,000 × 214 / 365 = approx. 117,260 PLN gross
 

🔸 5. Who cannot benefit from this exemption?

Regardless of turnover, you must be a VAT payer from the first sale if you conduct activities:

•  Advisory, legal, accounting services 
• Jewelry services 
• Sale of goods subject to excise tax (alcohol, cigarettes)
• Hairdressing, beauty, catering services
• Trade in electronics, car parts
• Shipping sales from Poland to the EU (e-commerce) (usually through OSS)

🔸 6. What happens after exceeding the limit?

 📌 After exceeding the limit:

• you lose the right to exemption at the moment of the transaction that exceeds 200,000 PLN – not just after a month!
• you are required to register for VAT-R before the next sale,
• from that moment on you must:
  • issue invoices with VAT,
  • submit JPK_V7 files,
  • maintain VAT records,
  • apply mandatory split payment (if applicable to your industry).

🔸 7. Voluntary resignation from the exemption

You can resign from the exemption at any time if:

• you want to deduct VAT on purchases,
• you collaborate with VAT payers (B2B),
• you operate in e-commerce or sell abroad,
• you use platforms like Google Ads, Meta, Amazon – which require active VAT-UE.

📌 Resignation occurs by submitting the VAT-R form with the appropriate indication.
 

📚 Legal basis 

• VAT Act, Article 113, paragraphs 1–13
• Regulation of the Minister of Finance on exemptions from the registration obligation
• Tax explanations from the Ministry of Finance
• Individual interpretations from KIS

✏️ Summary

 Sales up to 200,000 PLN/year (gross) – general services - ✅ Yes, you are entitled to exemption
You provide advisory or legal services - ❌ No, you must register for VAT
You exceeded the limit of 200,000 PLN - ❌ Registration is mandatory
You want to resign from the exemption voluntarily - ✅ Possible through VAT-R