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Poland for freelancer tax

T

theotheo

New member
Aug 3, 2023
15
2
3
44
Romania
#1
Hello there

After some research for choosing my new country of expatriation over Romania :
My only restrain is to stay in GDPR compliant country

Romania LLC : 14% Tax burden + Impredictability of fiscal reform
Bulgaria Self registered : 11.25% Tax burden + fear of corruption and alphabet not latin
Poland Sole Proprietorship : 10.5% Tax burden + but cold country
Cyprus Company : 15.15% Tax burden + K euros for maintenance + crazy rent price + no car
Portugal NHR + Self registered : 7% Tax (20% over 35% of the turnover) + I will never succeed into justifying enough business expense to keep the 35% tax reduction)

Estonia : is 20% CIT which is already over
Malta : can't understand the scheme there

I am thinking of registering as sole proprietorship in Poland
The tax burden is like :
- 8.5% Turnover tax (for IT testers jobs / 12% for Programmers)
- 3600 € annually (Reduced Social contributions for 2 years

The tax burden is 10.5%

Any recommendation for a polish company providing services for registration ?
Any counter tips for going into Poland (tax wise)

Thanks
 
#3
Poland freelancer setup is not a bad choice.
However, note that its taxed based on turnover so I believe you can't deduct expenses.
I know a few people who run such setups combined with entities in Estonia, paying overall 8.5% tax.
Estonian entity pays tax on profit distribution only, and business expenses can be deducted + having a legal entity is in some cases better for marketing as you can present yourself as a "company". Estonian also provides further tax structuring options that could be leveraged in the future.

Note that Cyprus offers 2.5% CIT regime for IP so total tax would be 5.15% if you add social tax. Qualifiying as a freelancer can be challenging though.
 
#5
theotheo said:
Thanks for reply

No IP work unfortunatly
Beg me pardon, Cyprus is a good choice, it's just that it doesn't fit my current income

My expense is very very few, 2-3K eur annualy
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Cyprus is indeed expensive, and you don't want to live cheaply in this country.

You can also consider establishing residence in some territorial or zero tax jurisdiction and living a digital nomad lifestyle (moving around and avoiding tax residency) using some offshore entity that helps you keep the tax at 0%, but it is not suitable for everyone.
 
#6
Good for others then, unfortunately none are countries GDPR for my case

I could have said Malta
I live for 6 month and get residency tax but what prevent them to say that my freelance income earned during the 6 first month are not foreign source (0%) but Malta source
 
#7
theotheo said:
Hello there

After some research for choosing my new country of expatriation over Romania :
My only restrain is to stay in GDPR compliant country

Romania LLC : 14% Tax burden + Impredictability of fiscal reform
Bulgaria Self registered : 11.25% Tax burden + fear of corruption and alphabet not latin
Poland Sole Proprietorship : 10.5% Tax burden + but cold country
Cyprus Company : 15.15% Tax burden + K euros for maintenance + crazy rent price + no car
Portugal NHR + Self registered : 7% Tax (20% over 35% of the turnover) + I will never succeed into justifying enough business expense to keep the 35% tax reduction)

Estonia : is 20% CIT which is already over
Malta : can't understand the scheme there

I am thinking of registering as sole proprietorship in Poland
The tax burden is like :
- 8.5% Turnover tax (for IT testers jobs / 12% for Programmers)
- 3600 € annually (Reduced Social contributions for 2 years

The tax burden is 10.5%

Any recommendation for a polish company providing services for registration ?
Any counter tips for going into Poland (tax wise)

Thanks
Click to expand...
Great summary! I am in the same situation than you.

I think I’m going to go for Bulgaria. As a freelance you pay 7.5% + social contributions which are around 5k per year but maintainable is quite cheap.

What is exactly the fear of corruption that you have? I mean, how can it affect to you?

Best wishes
 
#8
Would the Italy Impatriate scheme perhaps be interesting as Freelancer.
The combined tax burden would be about 17% in the North, 5% in the South. At a 200K profit.

The main constraint is that you need to stay in the country for a minimum of 2 years, and the tax reduction lasts for a maximum of 5 years.
 
#11
#12
mgs999999999 said:
I think I’m going to go for Bulgaria. As a freelance you pay 7.5% + social contributions which are around 5k per year but maintainable is quite cheap.

What is exactly the fear of corruption that you have? I mean, how can it affect to you?
Click to expand...
Wherever there is power and money, there is corruption. It's a worldwide issue. I come to think that some people on here see Bulgaria as a wild west. I would say don't draw such conclusions without even visiting this country.
 
#13
MRot said:
Actually the Italian pension body released a clarification this June, that the tax reduction from the Impatriati regime also reduces Social contributions, thereby making an attractive effective rate.

https://www.studionatellaebruno.com...ircolare n.,quella individuata ai fini Irpef.
Click to expand...

That's really good to know, makes Italy much more attractive.

It is an expensive country though. I get the feeling that Poland is still a better choice for OP.

Investment income is also taxed more favorably in Poland, which can also benefit OP in the medium to long term.
 
#14
scooterguy said:
That's really good to know, makes Italy much more attractive.

It is an expensive country though. I get the feeling that Poland is still a better choice for OP.

Investment income is also taxed more favorably in Poland, which can also benefit OP in the medium to long term.
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Poland is a bit cheaper, but Italy is definitely not expensive. If you make decent money, that difference in costs means very little.
That being said, I do think Poland is a very solid choice if you fall into the 8,5% bracket.

Italy is more restrictive, because you need to stay there for at least 2 years to get tax advantage. And the tax advantage only lasts for a maximum of 5 years.
Also, the best rate of 5% effective tax is only for living in the Southern part of the country. That is not the most attractive part to live.
 
Last edited:
#15
depending on your income sp. z o. o. in poland may also fit.
If i remember correct 9% from profit if not over 2 million eur a year and only 30 EUR instead 300 EUR per month for social contributions.
 
#16
MRot said:
Poland is a bit cheaper, but Italy is definitely not expensive. If you make decent money, that difference in costs means very little.
That being said, I do think Poland is a very solid choice if you fall into the 8,5% bracket.

Italy is more restrictive, because you need to stay there for at least 2 years to get tax advantage. And the tax advantage only lasts for a maximum of 5 years.
Also, the best rate of 5% effective tax is only for living in the Southern part of the country. That is not the most attractive part to live.
Click to expand...

Hmmm interesting...

I've always thought that living a decently good life in a place like Milan (renting your own apartment in a decent area, eating out a few times a week, etc.) was much more expensive than the same quality of life in a place like Krakow or Warsaw.

Am I wrong? Because, if I am, I might start considering Italy as a place to be in at some point during the next few years. :D
 
#18
369 said:
depending on your income sp. z o. o. in poland may also fit.
If i remember correct 9% from profit if not over 2 million eur a year and only 30 EUR instead 300 EUR per month for social contributions.
Click to expand...
9% and then capitals gains tax of 19% on top of that if you want to get the money out
 
#20
scooterguy said:
Hmmm interesting...

I've always thought that living a decently good life in a place like Milan (renting your own apartment in a decent area, eating out a few times a week, etc.) was much more expensive than the same quality of life in a place like Krakow or Warsaw.

Am I wrong? Because, if I am, I might start considering Italy as a place to be in at some point during the next few years. :D
Click to expand...
Milan is expensive. If you live in Italy and work remote, there are better and much cheaper choices than Milan with a high quality of life. Unless you really are a big city person.
 
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