Are you closing your business in 2022? Watch out for the health insurance contribution

As a consequence of the changes to the health insurance contribution payment rules introduced by the Polish Deal (Polski Ład), entrepreneurs are now required to pay a contribution based on income earned from the sale of goods sold and other assets remaining after liquidation.

Health Insurance Contribution for a “Liquidated Business”

Since January 2022, entrepreneurs are obliged to pay an additional health insurance contribution if they decide to liquidate their business. However, an essential condition for entrepreneurs to be subject to mandatory social and health insurance contributions is that they must be conducting non-agricultural business activity. Experts point out that if, in such a case, an entrepreneur starts disposing of assets in a month following at least one full month after the closure of the business, the obligation to pay the contribution does not arise, as the person will no longer be running a business.

From this it follows that if an entrepreneur shows some patience and refrains from disposing of assets in the same month in which the business activity ceased, they will avoid paying the contribution — even though the income from the sale of goods still originates from the previously conducted business.

Therefore, whether a person liquidating a business must pay the health insurance contribution depends, in this case, on the timing of the disposal of goods and assets.