Tax Alert 8/2025: Increase of the small business VAT exemption threshold to PLN 240,000 - amendment to the VAT Act adopted by the Sejm

On 24 June 2025, the Sejm adopted the Act amending the Value Added Tax Act (Sejm print No. 1232) [hereinafter: the Amendment], aimed at increasing the revenue threshold that entitles taxpayers to apply the so-called small business VAT exemption under Article 113 of the VAT Act. Pursuant to the Amendment, as of 1 January 2026, the VAT exemption will be available to taxpayers whose annual sales (including VAT) do not exceed PLN 240,000. The current threshold is PLN 200,000 per year.

The Amendment also introduces a transitional provision, under which taxpayers whose 2025 sales exceed PLN 200,000 but do not exceed PLN 240,000 will retain the right to apply the VAT exemption as of 1 January 2026.
Likewise, the exemption will also apply to taxpayers who commence taxable sales during 2025, provided that the value of sales - calculated proportionally to the period of business activity - exceeds PLN 200,000 but does not exceed PLN 240,000.

Further legislative process

The Amendment has now been referred to the Senate of the Republic of Poland for further proceedings. If adopted in its current form, it will then be submitted to the President of the Republic of Poland for signature and, following signature, published in the Journal of Laws.

We anticipate that the legislative process will be completed and the Amendment published between July and November 2025.