The business environment can be dynamic. For instance, rising income or unexpected costs can make your chosen tax form unprofitable. This often happens mid-year. In such moments, many entrepreneurs ask themselves: is changing my tax form mid-year possible?

The general answer is “no,” but there are very specific exceptions to this rule. In this article, we will explain the general principle and discuss the rare situations where changing your tax form during the year is not only possible but, in fact, mandatory.

Changing Your Tax Form: What is the General Rule?

The basic and most important rule regarding the choice of taxation form is simple: you make the decision once for the entire tax year.

You apply your chosen form (Progressive Tax Scale, Flat Tax, or Lump-Sum Tax) consistently from January to December. If you want to change it for the next year, you must do so by a specific deadline.

• Deadline for Change: You will need to submit a notification to change your tax form for 2026. The deadline is the 20th day of the month after you earn your first revenue that year.

Mid-Year Change Due to Losing the Right to the Flat Tax

This is the first situation that forces a change during the year. You will lose the right to the flat tax under one condition. This happens if you start providing services to a former or current employer. The services must also be the same as what you did for them under an employment contract that year.

• What happens? You lose the right to the flat tax from the day you receive the first revenue from such a transaction.
• Consequences: You must switch to the general principles (Progressive Tax Scale) from the beginning of the year. This means you must pay tax advances for all previous months. These must be paid according to the 12%/32% scale. You must also include interest for the delay.

Losing the Right to the Lump-Sum Tax

The right to pay the lump-sum tax can also be lost during the year. This will happen if you perform an activity that is excluded from lump-sum taxation.

A list of such activities can be found in Art. 8 of the Act on Flat-Rate Income Tax. This includes, among other things:

• Operating a pharmacy, pawnshop, or currency exchange.
• Trading in parts and accessories for motor vehicles.
• What happens? You lose the right to the lump-sum tax from the day you perform such an activity.
• Consequences: From that day until the end of the year, you must keep a Revenue and Expense Ledger (KPiR) and pay tax according to the general principles (Progressive Tax Scale). Importantly, in this case, you do not need to correct the previous months—you switch to the progressive scale going forward.

Does Exceeding the Revenue Limit Change Anything Mid-Year?

This is a common myth. Many entrepreneurs on the lump-sum tax worry that exceeding the revenue limit (€2,000,000) will force them to change their tax form immediately.

• How it really works: If you exceed the revenue limit for the lump-sum tax during 2025, you lose the right to this form of taxation only from the next tax year, i.e., from January 1, 2026. You continue to settle your taxes under the existing rules until the end of 2025.

Summary

As you can see, changing your tax form mid-year is not a tax optimization tool you can use at any time. It is a rare and mandatory situation. It results from losing the right to use a given form of settlement. That’s why it is so important to consciously choose your form of taxation at the beginning of the year and stick to its rules.

In the next post, we will cover the topic of sick leave for sole proprietors.