Choosing a tax method, and VAT

Three forms of taxation for a JDG

• Flat rate on recorded revenue (ryczałt) — tax calculated on revenue, with no deduction of costs. The rate depends on the type of activity (different rates for different PKD codes) — simpler record-keeping, but not worth it when running the business carries high costs.
• Progressive tax scale — progressive tax (12% and 32% above the threshold), calculated on income (revenue minus costs). This is the default if you don't choose otherwise at registration.
• Flat tax — a fixed rate of 19% on income, regardless of how high it is. Usually worth it at higher incomes, where the progressive scale would cost more.

You declare your form of taxation when registering in CEIDG and, as a rule, can change it once a year within the statutory deadline — it's worth consulting an accountant if your expected costs or revenue are hard to estimate at the start.