Month: May 2025

New Accounting Rules in Force from 2025

As of the beginning of 2025, new regulations have come into force changing the rules for maintaining accounting records. The key change is the increase in the net revenue threshold from sales, the exceeding of which triggers the obligation to keep accounting books and apply the Accounting Act. New definitions of entities have also been introduced.
The amendment results from the so-called “St. Nicholas Act” of 6 December 2024, which implements a number of EU directives into Polish law, including, among others, Commission Delegated Directive (EU) 2023/2775 of 17 October 2023, amending Directive 2013/34/EU of the European Parliament and of the Council with regard to the adjustment of size criteria for micro, small, medium-sized, and large undertakings. One of the outcomes of the amendment is broader access to accounting simplifications, including the exemption from maintaining full accounting books and the use of simplified records and reporting.

According to the rationale behind the implemented directive, the increase in thresholds entitling entities to apply simplified accounting is driven by the evolving economic environment, including the sharp rise in the prices of goods and services due to inflation.

Relaxation of the Obligation to Keep Accounting Books

A major change is the increase in the net revenue threshold from sales of goods and products in the previous financial year from EUR 2 million to EUR 2.5 million (i.e., from over PLN 8.5 million to over PLN 10.5 million, according to the average NBP exchange rate on the first working day of October of the previous year). As of the new financial year, revenues from financial operations will no longer be included when calculating the EUR 10.5 million threshold, in line with the need to standardize the definition of net sales.
This change will certainly benefit entrepreneurs, allowing them to document their income and expenses using simplified accounting methods. This, in turn, will reduce bookkeeping costs and enable companies to manage their own accounting independently.

New Definitions of Micro, Small, Medium, and Large Entities

The amendment introduces more precise classifications of entities covered by the Accounting Act. According to the Ministry of Finance, the new regulations will define micro, small, medium, and large entities more clearly, along with the conditions for acquiring and losing such status. This should provide entrepreneurs (and their accountants) with greater certainty regarding eligibility for simplified reporting and record-keeping rules.
The criteria used to classify an entity into one of the four categories include:

• Net revenue from sales of goods and services (excluding revenues from financial operations),
• Total balance sheet assets,
• Average annual employment expressed in full-time equivalents.

Entities are eligible to apply simplifications if, in the financial year for which the financial statements are prepared and the preceding year, they did not exceed at least two of the three criteria above. An entity loses its status if it exceeds the established values in two consecutive financial years. The new thresholds apply to financial statements prepared for financial years beginning after 31 December 2023.

Potential Consequences of the Changes

Micro and small entities may benefit from the following simplified accounting rules:

• Classifying finance lease contracts under tax law rather than the Accounting Act,
• Waiving the requirement to create provisions and deferred income tax assets,
• Applying simplified valuation methods for financial instruments under the Accounting Act rather than regulations issued by the Minister of Finance,
• Simplifying the calculation of product manufacturing costs by allowing indirect costs to be added to direct costs, regardless of capacity utilization.

Raising the threshold at which maintaining full accounting books becomes mandatory, along with more precise entity classification, will relieve many entrepreneurs from the obligation to maintain extensive accounting records and incur additional administrative costs.
This amendment is part of a broader trend of adapting Polish regulations to the dynamically changing economic environment and growing revenues of businesses. Entrepreneurs are encouraged to familiarize themselves with the new regulations and adjust their accounting practices accordingly.

If you have any questions regarding the amendment to the Accounting Act and its implications, please feel free to contact our law firm.

Change in NFZ’s Position

Recently, the National Health Fund (NFZ) has changed its stance regarding the obligation to pay health insurance contributions by a supervisory board member temporarily delegated to the management board. Previously, the prevailing opinion held that in the case of such delegation, no health insurance contribution was required. This position was reflected, for example, in NFZ decisions no. 1/2023/BP and no. 64/2023/BP. However, the recently published decision no. 19/2024/BP presents a completely different viewpoint. Based on this decision, the Fund will now require the payment of health insurance contributions from the remuneration of individuals delegated from supervisory boards to temporarily perform executive functions. This issue applies not only to commercial companies but also to cooperatives. It is worth noting that, in contrast to the NFZ, the Social Insurance Institution (ZUS) maintains a much more liberal approach regarding social insurance contributions.

Interpretation – Factual Background

In decision no. 19/2024/BP, the NFZ responded to an inquiry from a limited liability company, whose shareholders’ meeting dismissed a management board member and, for a period of up to three months, delegated the chairman of the supervisory board to act in his place. The temporarily delegated supervisory board member received remuneration for his role, although no employment or civil-law contract was signed. During the delegation period, the remuneration he usually received as a supervisory board member was suspended. Due to doubts raised by the company, the NFZ analyzed the provisions of Article 66(1)(35) and (35a) of the Act of 27 August 2004 on publicly funded health care services. According to these provisions, persons subject to health insurance include supervisory board members residing in Poland, persons appointed to functions by way of an appointment act, and commercial proxies (prokurenci), provided they receive income subject to income tax—regardless of its classification under the Personal Income Tax Act—unless their annual remuneration does not exceed PLN 6,000.
Upon analyzing the above provisions, the NFZ concluded that the term “delegate,” which in the case of a limited liability company occurs via a resolution based on provisions included in the company’s articles of association, is equivalent to an “appointment act” for the purposes of the law. To justify its stance, the NFZ referred to the Supreme Court ruling of 6 June 2023, case no. II UK 329/12. As a result, the Fund has fully reversed its previously held position. The NFZ is now moving toward increasing the financial burden on insured individuals and contribution payers.

What About Social Insurance Contributions?

So, how does the situation look when it comes to social insurance contributions for delegated individuals? It should be emphasized that being subject to health insurance contributions does not automatically mean being subject to social insurance contributions. In the case of a supervisory board member being temporarily delegated to perform management board duties, ZUS—unlike NFZ—maintains a favorable position. The limited liability company that submitted the inquiry to NFZ also submitted a question to ZUS about whether social insurance contributions must be paid if a supervisory board member is delegated to the management board and receives remuneration established solely by resolution. ZUS replied that in such cases, social insurance coverage does not apply. The authority stated that a supervisory board member should be treated as not subject to any social insurance, as the function is performed solely on the basis of an organizational relationship (i.e., a resolution), without the need for an employment or civil-law contract. As a result, the company, acting as the contribution payer, is not obligated to calculate, deduct, or remit social insurance contributions on the remuneration paid to the delegated individual. It should be emphasized that, for now, ZUS consistently maintains this favorable stance for insured individuals.

ZUS Revoked Sick Leave Benefit

Recently, the Polish Social Insurance Institution (ZUS) revoked an insured person’s right to receive a sickness benefit. The reason for the decision was the insured logging into the company’s system and clicking a single button to confirm the list of people covered by social insurance. The insured disagreed with the decision and filed an appeal. Ultimately, the court did not share the reasoning of ZUS and overturned the decision, granting the insured the right to the sickness benefit for the disputed period.
In this case, the insured was employed under an employment contract. Additionally, under a mandate contract (umowa zlecenia), she was responsible for managing group insurance. Her duties included confirming the number of people covered by the insurance, which involved logging into the company system and clicking the appropriate button. The insured was on medical leave at the time. Despite this, she carried out her duties under the mandate contract by logging into the company system and confirming the number of insured individuals. For performing this task, she received a remuneration of PLN 728.56. It is worth noting that according to the mandate contract, the insured could not delegate the task to a third party without the principal’s consent. Under these circumstances, ZUS concluded that she misused her sick leave by performing work during this time. As a result, ZUS denied her right to the benefit and demanded repayment of the allegedly unduly received amount. The insured appealed this decision.

The Court’s Position

The case was heard by the District Court in Łomża. The court indicated that, under the law, a sickness benefit is granted to an insured person who, due to illness, becomes unable to work. Thus, the benefit is meant to replace the salary the employee would have earned if not for the illness. It is not an additional gain, but compensation for lost income. The court referred to Article 17 of the Act on Cash Benefits from Social Insurance in Case of Sickness and Maternity. This provision outlines two independent grounds for losing the right to a benefit. The first is performing paid work during the period of incapacity for work; the second is using the sick leave contrary to its purpose. In this case, ZUS based its decision on the latter ground.
Upon reviewing the matter, the court found that the actions performed by the insured under the mandate contract were incidental, brief, simple, and necessitated by circumstances. Confirming the list of insured individuals was essential in this context. The court explained that the task did not require physical or intellectual effort and, therefore, did not affect the course or purpose of the medical leave. Moreover, the court noted that if the insured had not done it herself, she would likely have had to inform someone else, which probably would have taken more time. It was also noted that the remuneration for this task amounted to only 0.07% of the sickness benefit. The court concluded that such an amount could not be considered sufficient to support the insured and her family.

Finally, the court pointed out that the social insurance authority has the right to demand repayment of unduly received benefits only when the insured acted in bad faith. Therefore, the obligation to return the benefit applies only if the person knowingly and in bad faith accepts a benefit to which they are not entitled. The court emphasized that the purpose of the sickness benefit law is not to punish insured individuals for every minor instance of professional activity that in no way affects the goal or progress of medical leave. Additionally, stripping the insured of the right to a benefit for a prolonged period of leave due to one incidental action would undermine public trust in the state, violate the principle of social security, and be clearly unjust. Accordingly, the court reversed the challenged decision, granted the insured the right to the benefit, and found no grounds for requiring her to return it.

Reducing Formalities

At the end of February, the Sejm adopted the Act on the Conditions for Permitting Employment of Foreigners. The new regulation, being part of the so-called milestones of the National Recovery Plan, aims to streamline the process of hiring foreign workers in Poland and reduce abuses in the employment of citizens from outside the European Union. After a heated debate (including a motion to reject the bill entirely), the Sejm passed the act and forwarded it to the Senate for further work.
The new law will reduce the formalities related to applying for a work permit for a foreigner. Among other things, the obligation to conduct the so-called labour market test before hiring a foreigner will be abolished — according to the drafters, the current procedure is ineffective and unnecessarily burdens local authorities. Instead, a reverse model has been proposed — the county governor (starosta) will only be able to define a list of occupations and types of work for which work permits will not be issued to foreigners intending to work in a given county. As stated in the justification for the bill, such lists are to be established in the event of significant deterioration in local labour market conditions. The assessment will consider, in particular, the scale of local mass layoffs and the number of registered unemployed job seekers in specific professions relative to the number of job offers reported to county labour offices.

Grounds for Refusing a Work Permit

The draft bill also includes an expanded list of grounds requiring mandatory refusal to issue a work permit. Under the new regulation, the voivode will also be obliged to refuse a work permit if the authority has information suggesting that the probable purpose of obtaining the permit is a fictitious assignment of work to a foreigner or that the foreigner will not actually perform work in Poland under the conditions specified in the permit. Until now, the voivode was not always required to refuse the permit in such cases. Due to the vague concept of “fictitious assignment of work to a foreigner,” the drafters have prepared a set of criteria that the deciding authority should consider when reviewing applications.
Penalties for illegally employing foreigners have also been increased. Under the proposed changes, for example, employing a foreigner who is illegally staying in Poland may result in a fine ranging from PLN 3,000 to PLN 50,000 (currently PLN 1,000 to PLN 30,000). As explained in the justification for the bill, the increase in penalties is intended to combat the deliberate decision to employ foreigners in violation of the law while treating such actions as an acceptable financial risk. Time will tell whether higher fines will reduce illegal employment.

Electronic Work Permit Procedure

A fully electronic procedure for issuing work permits to foreigners will be introduced — from submitting the application to receiving the final decision. This is expected to shorten the processing time and streamline the entire procedure. Moreover, appeal proceedings will also be handled electronically. IT systems will also be used to monitor the use of permits and declarations concerning foreign employment. Full digitalisation is expected within two years of the law’s publication.
The new law introduces significant changes to the employment of foreigners, aimed at simplifying procedures, increasing oversight, and reducing abuse. These new regulations may contribute to more effective labour market management while strengthening protection against illegal employment. The bill is now awaiting further debate in the Senate, which will determine its final form.

If you have any questions regarding the employment of non-EU workers, please feel free to contact our Law Firm.

Amendment to the Labour Code

The Extraordinary Sejm Committee for Amendments to the Codifications has prepared a report on the draft amendment to the provisions of the Labour Code (Sejm print no. 1153). Although the amendment covers changes to only two articles, it may significantly impact the current method of recruiting new employees. The draft proposes the addition of a new Article 18(3ca) and an amendment to Article 22(1) § 1 point 6 of the Labour Code, which concerns the scope of personal data that an employer may request from a job applicant.
Once the amendment enters into force, employers conducting recruitment will face a new obligation to provide key information from the candidate’s perspective. According to the proposed Article 18(3ca), a job applicant must be informed of the salary level, its starting amount or its range (so-called “salary brackets”) foreseen for the position. The employer will also be obliged to provide access to the remuneration regulations in force at their workplace or the relevant provisions of a collective labour agreement – if applicable.

Importantly for employers, this information obligation does not necessarily have to be fulfilled in the job advertisement (which would mean making it available to a wide audience, including potential competitors). It may also be provided later – before the job interview or, at the latest, before establishing the employment relationship. Information on remuneration can be given to the candidate either in paper or electronic form.

Combating Discrimination

In addition to the above, the draft amends Article 22(1) § 1 point 6 of the Labour Code. The scope of personal data that an employer may request from a candidate will no longer include information on remuneration in current or previous employment. The currently applicable regulations generally require information on the “employment history”, but the proposed amendment aims to completely eliminate the possibility of asking about previous salaries.
The amendment implements Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023, which obliges Member States to adopt regulations increasing the transparency of the recruitment process.

Additionally, under the proposed provisions, employers will have to ensure that job advertisements and job titles are gender-neutral and that the entire recruitment process is conducted in a non-discriminatory manner. In practice, this may mean the necessity of using feminine forms (feminatives) or gender-neutral forms in job titles and descriptions.

Need for Changes in Recruitment Procedures and Remuneration Regulations

The above changes will require the adjustment of remuneration regulations and internal recruitment procedures. For this reason, business representatives are calling for a sufficiently long vacatio legis to be included with the amendment, allowing for proper preparation for the new obligations.
If you have any questions or doubts regarding the application of anti-discrimination procedures or the new recruitment rules, we encourage you to contact our Law Firm – we will be happy to provide any necessary information.