Anti-crisis policy for self-employed during the crisis caused by the COVID-19 epidemic

The so-called «self-employed», i.e. people running a sole proprietorship in Poland in 2019 constituted a group of nearly 3 million people. In January-February 2019, an average of 916 new sole proprietorships were arriving daily.

Registering a sole proprietorship is free of charge and does not require any initial capital to operate.

However, self-employed should remember that he bears the so-called ’’personal liability’’ for all receivables and obligations resulting from conducting business activity. This responsibility may also extend to his spouse.

According to statistical data from the CEIDG register (Central Registration and Information on Economic Activity) on April 22nd, 2020 only 462 new economic activities were registered, while 452 entities filed an application for suspension of economic activity. Self-employed workers are often to a large extent, people who perform the functions of managers in large companies, board members, craftsmen, IT specialists, sales agents, lawyers or people representing the broadly understood cosmetics industry.

Self-employed constitute the largest group which can count on assistance of the Polish state involving crisis caused by COVID-19 virus.

The core of assistance programs (so-called ‘’Anti-Crisis Shield’’) has been constituted primarily in two acts:

i)the Act of 31 March 2020 amending the Act on special solutions related to the prevention and eradication of COVID-19, other infectious diseases and crisis situations caused by them, as well as certain other acts (hereinafter: Shield 1.0.); and in

ii)the Act of 16 April 2020 on specific support instruments in connection with the spread of the SARS-CoV-2 virus (hereinafter: Shield 2.0..

The solutions provided by the Anti-Crisis Shield for self-employed are following:

1. Service related to business downtime in the amount of PLN 2,080;

• 2.0. abolished the requirement that the income obtained in the month preceding the month in which the application for this benefit was submitted could not be higher than 300% of the average monthly salary;
• however, it should still be demonstrated that the revenues in the month preceding the submission of the application were at least 15% lower than the revenues obtained in the month preceding that month;

2. Exemption from the obligation to pay unpaid receivables to ‘’ZUS’’ (Social Security Board) contributions;

• To obtain an exemption, self-employed must submit an application;
• may be granted for a maximum of 3 months: from March 1, 2020 to May 31, 2020; Only self-employed persons who set up a business before April 1, 2020 can apply for dismissal. (i.e. until March 31, 2020);
• Shield 2 introduces the option of receiving a refund of paid contributions for March 2020; currently, for dismissal can apply self-employed which in the first month for which the application is submitted earned less than 300% of the average monthly gross salary in the national economy in 2020, so up to PLN 15,681.

3. Possibility of receiving a loan of PLN 5,000 to finance costs related to the business;

• he loan is granted for a period of 12 months, but may be canceled in full within the interest; self-employed has run business for the next 3 months;

4. Co-financing of part of the operating costs from the District Labor Office [if the self-employed shows a decrease in turnover of at least 30%];

• when calculating the decrease in turnover, two consecutive months in 2020 (e.g. February-March) or 60 consecutive calendar days should be taken into account and combined with the same two months in 2019.

If the self-employed has a difficult financial situation or does not want to lose financial liquidity – self-employed also has the opportunity to submit an application in order to take advantage of the following concessions and facilities:

• deferrals or spread of installment of ZUS (Social Security Board) receivables;

• deferrals in the payment of income tax;

• redemption of tax arrears;

• paying lower advances for income tax

• obtaining more favorable loan terms and guarantees;

• obtaining more favorable credit terms related to technological innovations, research, etc.;

• temporary expiry of obligations under the rental or tenancy agreement;

• suspension of current deadlines for the implementation of contractual obligations;

• recovering advance payments, e.g. in connection with the planned rental of conference space;

• take earlier advantage of a preferential tax rate of 5% if it obtains income related to the commercialization of qualified intellectual rights (so-called IP Box);

•temporary expiry of obligations under the tenancy agreement;

• suspension of current deadlines for the implementation of contractual obligations;

• recovering advance payments paid, e.g. in connection with the planned rental of conference space;

• take advantage of a preferential tax rate of 5% if self-employed obtains income related to the commercialization of qualified intellectual property rights (so-called IP Box relief);

• deduction from the income of the donation transferred to fight COVID-19 (valid only under certain conditions);

• deduction of loss incurred in 2020 on income for 2019;

• deferral of perpetual usufruct payments;

• extension of the work permit period;

• postponing the date of payment of property tax.

It should be remembered that the granting of relief or benefit may depend on the individual situation of self-employed or the type of economic activity which self-employed performs. In some cases, there is a risk that the self-employed may be required to return the benefit which he or she received.

This article is for informational purposes only and should under no circumstances be treated as a legal opinion or advice.

In order to obtain more detailed information under which circumstances relief or grant is available or any other legal aid, please contact a DT’s lawyer.

2020-04-24 15:23