Remuneration for managing a company does not become business income simply because the manager is registered in the Central Registration and Information on Business (CEIDG) and issues an invoice. The Personal Income Tax Act assigns such income to personally performed activities, which excludes flat-rate and lump-sum taxation on recorded income. The Supreme Administrative Court reaffirmed this in its judgment of 5 February 2026, file reference II FSK 637/23.
The problem primarily affects board members, managing directors, and partners who collaborate with their companies in a B2B model. The assumption that a business invoice automatically opens the door to preferential tax treatment is intuitive, but in this area, it leads to erroneous conclusions
The source of income determines the form of taxation
The form of taxation under the Personal Income Tax (PIT) depends on the source of income, not the taxpayer's status. Article 10, Section 1 of the Personal Income Tax Act distinguishes, among other things, between self-employed activity and non-agricultural business activity. The flat-rate tax under Article 30c and the lump sum tax on recorded income are available only for income from the latter source.
Income from self-employed activity is taxed solely according to the tax scale. Therefore, if the law assigns a given income to this source, the taxpayer has no choice of taxation method, regardless of how they organize their activity.
The tax definition of business activity, as defined in Article 5a, item 6 of the Personal Income Tax Act, covers gainful activity conducted on one's own behalf, in an organized and continuous manner. However, it contains an important caveat: income from such activity cannot be included in other sources specified in the Act. Therefore, regularity, payment, and registration in the Central Registration and Information on Business (CEIDG) do not determine classification unless a specific provision specifies a different source.
Regardless, Article 5b, Section 1 of the Personal Income Tax Act provides for the so-called negative entrepreneur test. Activities are not considered economic activity if the principal bears joint and several liability towards third parties, the activities are performed under their direction and at a place and time designated by them, and the person performing the activities does not bear any economic risk. This test is crucial when assessing self-employment, but in the case of management services, the legislator went further and addressed the issue directly.
Income from managing the business
Article 13 item 9 of the Personal Income Tax Act classifies income earned under business management agreements, management contracts, or similar agreements as income from personally performed activities. This provision also explicitly covers income from such agreements entered into as part of the taxpayer's non-agricultural business activities.
The legislator therefore specifically envisaged a situation in which a manager registers a business, enters into a contract as an entrepreneur, uses a Tax Identification Number (NIP), and issues invoices. Even then, the income remains income from personally performed activities. Article 13, point 9, is specific to the general rules for qualifying income from business activities, including Article 5b, paragraph 2, which concerns companies without legal personality.
For this reason, it is irrelevant whether the manager meets the negative entrepreneur test under Article 5b, paragraph 1. Even if the manager bears economic risk and liability to third parties, the classification of the contract as a management contract determines the source of income. The Minister of Finance confirmed this approach in the general interpretation of May 31, 2010, no. DD2/033/95/KBF/10/403.
Established case law
For many years, administrative courts have consistently denied managers the right to a flat tax. The starting point is the resolution of seven judges of the Supreme Administrative Court of April 26, 2010, file reference II FPS 10/09. This resolution concerned partners in a general partnership providing management services, and the Supreme Administrative Court ruled that their income cannot be taxed under the flat tax. The extended bench concluded that management services are subject to the flat tax rate regardless of the form in which they are performed.
The latest confirmation is the Supreme Administrative Court's judgment of February 5, 2026, file reference II FSK 637/23. The case concerned the president of the management board of a limited liability company, who performed a management contract as part of a sole proprietorship and intended to account for his remuneration as income from business activities. The Supreme Administrative Court agreed with the authority's position, noting that the activities performed under the contract overlapped with the statutory obligations of a management board member under the Commercial Companies Code.
The ruling's discussion also cited the position of the court of first instance. The Provincial Administrative Court emphasized that the authority is strictly bound by Article 13 points 7 and 9 of the Personal Income Tax Act, and the parties cannot, at their discretion, exclude or limit the application of this provision. Therefore, the B2B form does not determine the taxation method.
The content of the contract is more important than its name
The actual scope of duties, not the title of the contract, determines the qualification. If a person actually manages the enterprise, is responsible for results, makes decisions, and organizes the work of others, labeling the service as consulting or coordination does not change its nature. The concept of contracts of a similar nature in Article 13, paragraph 9, covers any contract whose essence is the management, organization, or direction of the enterprise or a significant area thereof.
The line between preparing a decision and making it is drawn. The advisor gathers information, prepares analyses, and recommends solutions. The manager selects an option, implements it, and is responsible for the results. For example, the advisor might present several concepts for reorganizing the sales department, while the person who selects one, issues instructions to the team, and accounts for its results, is actually managing.
In practice, this line can be blurred, especially when the same person serves on the management board and also provides advisory services. In such cases, authorities assess all the circumstances: the content of the contract, the manner of its execution, the remuneration structure, and the relationship to the corporate function.
When can a partner invoice the company?
A shareholder serving on the management board may provide the company with separate services as part of its business activities, provided they do not constitute hidden management. The regulations do not prohibit a company from purchasing specialized services from shareholders on market terms. Officials' suggestions that shareholders should generally refrain from invoicing their companies are not supported by the law.
In practice, these services involve a distinct subject matter and measurable outcome. These may include market and financial analyses, pricing advice, new product concept development, IT, engineering, auditing, or training services, as well as the implementation of a specific system, provided it does not involve the right to manage the business.
Separate consulting, technical, or analytical services may be invoiced as part of business operations if they are genuine, needed by the company, separated from management functions, priced at market value, and properly documented. Ultimately, qualification is determined not by the content of the contract, but by what the contractor actually does. We recommend that companies and managers operating in a B2B model review their existing contracts with the risks described.
This article is for informational purposes only and does not constitute legal advice.
The law is current as of September 25, 2026.
Author/Editor of the series:
