In 2025, with the extended temporary protection for Ukrainian citizens in Poland (until September 30, 2025), more and more people from Ukraine are deciding to start their own businesses. New tax regulations, including the cash-based personal income tax (PIT) and changes to tax relief, make it easier to start a business. In this article, we explain how to take advantage of these opportunities and avoid the pitfalls of tax residency and double taxation. Akwadrat Accounting Office specializes in serving international clients – we will help you every step of the way.

Cash PIT – new relief for small entrepreneurs from 2025

As of January 1, 2025, the cash-based PIT system was introduced, allowing businesses to settle income tax only after receiving actual payments from customers. This is an ideal solution for startups where financial liquidity is crucial.

Key principles:

• Turnover limit: Initially up to PLN 1 million per year, but increased to PLN 2 million from August 2025, which covers more small businesses.
• Who can benefit?: Only sole proprietorships (SMEs) taxed according to the tax scale or flat tax. Ukrainian citizens with legal residence and a UKR PESEL number can report their choice of the cash-based PIT to the tax office by February 20, 2025 (or by the deadline for submitting the first advance payment of the year).
• Benefits: Tax deferral for up to several months, improving cash flow. Tax-deductible expenses are accounted for similarly – after payment.

For example, if you issue an invoice in January 2025, but the customer pays in March, you won’t pay your personal income tax until April. This relief is especially valuable for the service industry, which is popular among Ukrainians in Poland.

Avoiding double taxation – the Poland-Ukraine agreement in practice

If, when setting up a company in Poland, you also have income from Ukraine (e.g., from remote work or real estate), the 1994 Double Taxation Avoidance Agreement, which is still in force in 2025, is crucial. The agreement prevents paying tax twice on the same income.

• Tax residency: If you reside in Poland for more than 183 days a year or have your center of vital interests (family, business) here, you become a Polish tax resident. You are then taxed in Poland on all your worldwide income, but the treaty allows you to deduct tax paid in Ukraine.
• Avoidance methods: For salaries – the exemption method with progression (income from UA is not taxed in Poland, but affects the tax rate). For dividends or real estate – proportional deduction.
• For Ukrainian citizens: 2025 will see simplifications for refugees – you can submit a residence declaration, which simplifies personal income tax (PIT) settlements. Remember to obtain a Ukrainian tax residency certificate to avoid the 20% withholding tax.

For example: Income from work in Ukraine (e.g. PLN 50,000) – in Poland you do not pay PIT on this amount, but you add it to the tax base, which may affect the 32% threshold.

Starting a business in Poland as a Ukrainian citizen – steps and tax breaks

Ukrainian citizens with temporary protection can establish a self-employed business on an equal footing with Poles. The process is simple and online through CEIDG.

Steps:

• Obtain a PESEL UKR (extended until September 2025).
• Choose the form of taxation (scale, linear 19% or lump sum).
• Register your company in CEIDG – provide your details, PKD codes and address.
• Report to ZUS and the tax office.

Additional relief in 2025:

• Reduced health insurance contribution: Minimum is PLN 314.96/month (75% of the minimum wage).
• Start-up relief: 6 months without ZUS contributions for new companies.
• No VAT for small businesses: If your turnover is below PLN 200,000 per year, you do not have to register for VAT.
• Research and development relief: For innovative businesses, deduction of up to 200% of costs.

At Akwadrat, we’ll help you set up your business step by step, avoid errors in your tax returns, and maximize your tax relief – contact us today!

Summary

New tax breaks in 2025 offer Ukrainian citizens a chance to secure a foothold in Polish business. Remember, professional accounting services minimize risk. We invite you to the Akwadrat Accounting Office for a personalized consultation.