Government’s Assistance package

Government’s Assistance package
For small businessFor employees

Needless to say, that the global COVID-19 virus pandemic took everyone by surprise, and unfortunately made a huge negative impact on businesses not only here in Poland and its neigbhours but in almost every country around the world.

Beginning in mid-March 2020, a soft lockdown was introduced in Poland in order to prevent the situation that took place in Lombardia and other northern regions of Italy.

Unfortunately, the economic collateral damage from the lockdown can hit the European markets harder, than the actual pandemic.

According to the National Bank of Poland, and other private banks, that operate in Poland, the upcoming recession is inevitable.

According to the latest forecasts, Poland’s GDP will shrink by 4.3% in 2020, while the HICP inflation will decline to 2.5, compared to last year.

The country’s GDP should bounce back by 4.1% earlier next year, but the damage has already been done. The only silver lining is that Poland’s recession numbers are among the lowest on the European continent.

On April 9, 2020 as a part of its Quantitative Easing Programme, the National Bank (NBP) cut the rates by 50bps to a historical low (0,5%), hoping that it will give companies and people alike access to cheaper credits in PLN, and reduce the burden for those who have already taken a loan.

Like other EU members, Poland is trying to support businesses that are suffering because of the restrictions imposed by the government dude to the COVID-19 pandemic.

For small business

In April, the Polish government adopted (and then supplemented) an assistance package aimed at small businesses and workers employed on civil contracts.

The package itself has an official name — “Anti-Crisis Shield” — Tarcza Antykryzysowa. Currently, Polish media prefer using the marketing name rather than vague “government’s assistance package”.

Let’s take a closer look.

First of all, the package is primarily benefits for the so-called self-employed — osoba samozatrudniona. “Self-employed” while not being an official term, it is usually used by the Poles to describe sole-traders.

Meaning, that if you provide services as a sole trader (your business is registered in the CEIDG registry), you are entitled to some tax breaks, when paying the social security contributions (ZUS).

The tax relief will last for a period of 3 months, during which sole traders are not obligated to paid the mentioned contributions to ZUS. Just to remind you, they can be as high as €350 a month (standard rate).

The same rule applies to the so-called “microenterprise” — mikroprzedsiębiorca. This is an official term, under the current Polish Law, and is used to describe any legal or natural person, that:

  • employs up to 9 people
  • whose annual turnover does not exceed € 2,000,000.

It basically means that if you incorporated let’s say a Polish LLC — Sp. z o.o., that 3-months tax relief is for you, under the condition that your company is officially a “microenterprise”.

For employees

This assistance package, on the other hand, is for people, who are employed on the so-called civil law contracts, that are very popular in Poland in place of employment contracts:

  • umowa o dzieło
  • umowa zlecenie

Those working under those contracts are eligible to receive compensation. Provided, that they fulfill the requirements.

If due to the epidemic and the subsequent restrictions imposed by the Polish Government as a part of its soft lockdown programme, the contract could not be performed or completed, and was declared invalid or void, the “employee” is eligible to receive compensation.

Currently, the amount of the so-called Idle Time Pay (świadczenie postojowe), that you can receive as compensation for lost income is set at is PLN 2080 — 80% of the current minimum wage.

This Idle Time Pay is aimed at people employed in the HoReCa business sector, medical companies, hairdressers and restaurant workers, who have lost the opportunity to work, due to the restrictions imposed by the Polish government.

It should be noted that Idle Time Pay is not subject to Personal Income Tax. If we would like to receive the said compensation, we have to inform Social Security Authorities (ZUS).

The safest (and the fastest) way to do it is via the PUE ZUS online system, by using your ePUAP profile or your certified electronic signature.

There’s of course an alternative avaialble.

Although it is possible to do this by post or in person at one of the ZUS offices throughout the country, by leaving your application in a special box for documents. There’s no direct contact with a ZUS employer until the situation gets better.

If your company is a little bit bigger — and is a representative of the SME sector (MŚP), you are also entitled to receive some benefits. Under the current Polish Law to receive the SME status, your company has to fulfill the following requirements:

  • employ up to 249 people
  • its annual turnover cannot exceed €50,000,000.

In accordance with the Anti-crisis shield package, SME companies that suffered loss during the pandemic and due to the restrictions introduced by the government are entitled to:

  • deferral of tax and social security contribution payments;
  • subsidies, aimed at reducing labour costs
  • additional funding to pay up worker’s wages
  • access to cheaper credits wit the Polish Development Fund (PFR)

Those measures are supposed to help struggling companies stay afloat and not lose liquidity until the restrictions are eased in the coming months.