Yes, it would be a good possibility to optimise the tax burden, but we have to check if you meet the conditions. Farmers in Poland don’t pay any income tax, they pay only agricultural tax, which is based only on the area of agricultural land – however, that’s the case if the size of activity is lower, than the sizes envisaged for the special departments of agricultural production – art. 2, paragraph 1 of the Natural Persons Income Tax Act:
“The provisions of the Income Tax Act do not apply to: 1) income from agricultural activities, with the exception of special departments of agricultural production”.
So first of all we have to check if you perform agricultural activities. The definition is in art. 2 paragraph 2 of the Natural Persons Income Tax Act:
“2. Agricultural activities, as defined in paragraph 1 point 1, is the activity consisting in the production of plant or animal products in the unprocessed (natural) state from own crops or breeding, including production of seed, nursery, breeding and reproduction material, vegetable production in the ground, greenhouse and in foil tunnels, production of ornamental plants, cultivated and orchard mushrooms, breeding and production of breeding material of animals, birds and insects, animal production of the industrial-farm type and fish breeding, as well as activities in which minimum periods of detention of purchased animals and plants during which their biological occurs the increase is at least:
1) a month – in the case of plants, 2) 16 days – in the case of fattening geese or specialized wysokointensywnego ducks, 3) 6 weeks, in the case of other poultry for slaughter, 4) 2 months, in the case of other animals – from the date of purchase”.
If on the basis of this definition we can assume, that you perform agricultural activities, there is a second question about the size – in order to check if you fall into special departments of agricultural production.
The definition is in art. 2 paragraph 3 of the Natural Persons Income Tax Act:
“3. Special departments of agricultural production are: production in the ground, greenhouse and in foil tunnels, mushrooming and their mycelium, plants growing “in vitro”, breeding and rearing of slaughter poultry, and poultry farming, breeding, laying and rearing of animals for their fur and for laboratory animals, breeding earthworms, silkworm breeding, apiaries and breading of other animals outside the farm”.
If your activities fall into this definition of the special departments of agricultural production there is still a chance, that the size is lower than the sizes given in Annex 2. of the Natural Persons Income Tax Act, called: TABLE TYPES AND SIZES OF SPECIAL DEPARTMENTS OF AGRICULTURAL PRODUCTION AND THE ESTIMATED ANNUAL INCOME.
CONCLUSION
If you perform agricultural activities (according to the definition of agricultural activities) and the size of your activities is lower than the sizes given in Annex 2. of the Natural Persons Income Tax Act, than you don’t fall into the definition of the special departments of agricultural production and you don’t have to pay any income tax and you’d have pay only the agricultural tax, which depends on the size of your agricultural land used for the activities.
