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Month: March 2024

Reduction in the VAT rate of cosmetic services

VAT rate reduction for cosmetic services

 

A regulation has been published reducing the VAT rate for cosmetic services. The reduction is effective as of April 1, 2024. In connection with the change in the VAT rate, it may be necessary to determine the proper classification of the cosmetic services provided and reprogram the cash registers.

A reduced VAT rate of 8% is applied to hairdressing services in Poland. In the regulation on reduced VAT rates, the scope of this preference was expanded to include other services included in the so-called “beauty” sector, i.e. certain cosmetic services. Thus, both hairdressing and cosmetic services, classified in the PKWiU grouping 96.02.1, will be treated the same regarding VAT rates.

The scope of preferences in cosmetic services has been determined using the Polish Classification of Goods and Services (grouping PKWiU 96.02.1 Hairdressing and other cosmetic services) – see table.

 

1 96.02.13.0 Beauty, manicure and pedicure services
2 ex 96.02.14.0 Beauty services, manicure and pedicure, provided at home
3 96.02.19.0 Other cosmetic services

A reduced rate of 8% was therefore applied to certain cosmetic procedures, such as beauty and facial treatments (which do not require specialized medical knowledge), manicures and pedicures, eyebrow and eyelash styling, ear piercing, related to beauty care counseling and makeup application, in personal hygiene, body care, depilation, ultraviolet and infrared radiation.

 

Not all services commonly recognized as cosmetic services are such according to the PKWiU classification. Such services are not, for example, invasive services such as tattooing or piercing services. Some of them are also classified as medical treatments, which – after meeting the requirements of the VAT Act – can enjoy exemption from this tax.

For this reason, it may be that some cosmetic establishments, in order to benefit from the 8% rate, will have to determine which of the treatments they provide can benefit from the 8% rate and which cannot. This can be done by applying for a Binding Rate Information (WIS). You also need to remember to change the VAT rate in the cash register.

 

 

 

egal basis

Decree of the Minister of Finance on March 14, 2024, amending the Decree on reduced rates of tax on goods and services – Journal of Laws of 2024, item 387
Ewa Slawinska
Lawyer, editor-in-chief of the “Accounting Monitor”.

Source: INFORLEX Companies and accounting offices publication in the INFORLEX series
Copyright © 2024 INFOR PL S.A. All rights reserved.

 

Accident premium for 2024

Changes in Social Security – accident premium for 2024

 

Accident insurance rates are changing. According to the new regulation, entrepreneurs will pay new premiums starting in April 2024.

 

Recall that in March of each year, the Minister of Family and Social Policy has the opportunity to issue a decree setting new rates for accident insurance. The rates published in March can be both increased and decreased and take effect the following month, i.e. April of the same year.

Last year, accident insurance rates remained unchanged. This year, however, the Ministry issued a new regulation. This means that some business people will pay a different accident premium than before.

 

Recall that accident insurance rates are set separately for each occupational group, based on the “accident” rates recorded in a given occupation. Thus, the accident premium set for the mining industry, for example, is almost 10 times higher than the premium paid by employees in the tourism industry. However, such calculated rates apply only to those entrepreneurs who employ more than 9 employees.

The situation is different for small companies (with up to 9 employees), including sole proprietors. This is because such persons pay an accident premium at a fixed rate, independent of the industry in which they operate. The flat rate for small businesses is 50% of the maximum rate.

As for the maximum rate, it is worth remembering that it is always quoted in the same industry – mining. Thus, this rate depends on how high the accident premium set for small businesses will be.

As of April 1, 2024, a new Decree of the Minister of Family and Social Policy will take effect, which changes the rates of accident insurance for certain occupational groups.

Under the new regulation, however, the maximum rate will not change. Indeed, as of April 2024, the maximum rate for the mining industry will still be 3.33%. This means that sole proprietors who employ no more than 9 people will pay the new accident premium at the current rate of 1.67%.

 

As a result, the accident premium for small businesses for 2024 will still be PLN 78.40.

Recall that as of January 2024, Social Security premiums have increased by PLN 181.84 to PLN 1,600.32.

You can read the full table of the new ZUS premiums here.

 

Dominant partner Social Security contributions

Dominant partner of limited liability company will not pay Social Security contributions

 

As a rule, partners of limited liability companies are not subject to mandatory social insurance. The exceptions are single-person entities. ZUS has so far taken the position that a company in which one of the partners is the dominant entity should be treated as a sole proprietorship, and the partner with the majority shareholding should pay social contributions. According to the authority, a partner with, for example, a 1% shareholding is an illusory shareholder. The positions of the courts in this regard were also not uniform. The dispute finally reached the Supreme Court, which issued an important resolution for limited liability company shareholders.

SN: a company with a dominant partner is not a sole proprietorship

On 02/21/2024, the Supreme Court, sitting in a three-judge panel, adopted a resolution (III UZP 8/23) in which it unequivocally indicated that a partner in a two-person limited liability company holding 99 percent of the shares is not subject to social security. The resolution challenged the previous position of the Social Security Administration, which claimed that a partner holding 99 percent of the shares in a limited liability company should be considered the sole shareholder of the limited liability company subject to social insurance.

 

The Commercial Companies Code clearly defines the concept of a sole proprietorship. The Supreme Court’s resolution showed that there should not be situations where an existing definition of a sole proprietorship is disregarded by the Social Security Administration and a new one is created to issue a decision unfavorable to entrepreneurs.

 

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