Poland (March 2023)

Cooling-off Period

Poland has fully implemented EU Directive 2011/83/EU of 25 October 2011 on consumer rights (see Consumer Rights Act).

Due to the above, a consumer has a cooling-off period of 14 days to withdraw from a distance or off-premises contract without giving any reason. The cooling-off period is fixed by 12 months if there is a violation of the information duties by the seller. Moreover, Poland has excluded the application of the above regulations to off-premises contracts for which the payment to be made by the consumer does not exceed PLN 50.

As of 1 January 2021, another critical amendment to the Consumer Rights Act and the Civil Code came into force, consisting in the introduction of a new category of protected persons, i.e., the so-called “entrepreneur-consumer,” being a natural person concluding a contract directly related to their business activity, when it results from the content of this contract that it does not have a professional character for this person, resulting in particular from the subject of his/her business activity, made available based on the provisions on the Central Register and Information on Business Activity. In particular, the following provisions will apply to this category of persons: on prohibited contractual clauses, on statutory warranty for defects, and the right of cancellation.

Starting from 1 January 2023, as a result of the implementation of the so-called Omnibus Directive, significant changes to the Consumer Rights Act were made. According to the new provisions of the abovementioned Act, if the consumer concluded a contract off-premises during an unscheduled visit of the entrepreneur to the home or habitual residence of the consumer or during a trip, the withdrawal period is 30 days. Also, a new information obligation was added to the Consumer Right Act – no later than at the time when the consumer expresses their will to be bound by a distance or off-premises contract; the entrepreneur is obliged to inform the consumer clearly and understandably about individual price adjustments based on automated decision-making if the entrepreneur uses such. Changes were introduced in the Information on Prices of Goods and Services Act – in each case of a reduction in the price of goods or services, information on the lowest price of the goods or services in force during the 30 days before the introduction of the reduction shall be displayed in addition to the reduced price.

 

Pyramid Schemes

Polish law defines (i) an avalanche sale system and (ii) a pyramid promotional system.

• under Article 17c (1) of the Combating Unfair Competition Act, avalanche sale is based on proposing the purchase of goods or services by making the purchasers a promise that they will obtain material benefits in exchange for enticing other people to enter into a sales transaction so that they get the same benefits as a result of enticing further people to participate in the system constitutes an unfair competition practice. Under Article 24a of the Combating Unfair Competition Act, such practice is punishable by imprisonment for a period between 6 months and eight years.
• under Article 7 (14) of the Counteracting Unfair Commercial Practices Act, establishing, conducting, or promoting pyramid promotional systems in which the consumer performs a service in exchange for the possibility of receiving material benefits that are primarily dependent on the introduction of other consumers into the system and not on sale or consumption of products constitutes an illegal, unfair market practice threatened with possible criminal liability.

 

Multi-Level Marketing

There is one general provision concerning sales systems specifying the grounds of their legality, which applies in particular to multi-level marketing systems.

Under Article 17c (2) of the Combating Unfair Competition Act, a sales system based on proposing the purchase of goods or services by making the purchasers a promise that they will obtain material benefits is not prohibited in Poland if the following conditions are satisfied jointly:

• material benefits obtained from participation in the system are obtained from funds generated as a result of the sale of goods and services at prices that may not flagrantly exceed the actual market value of these goods and services (and not in exchange for enticing other people to enter into sales transactions),
• a person who withdraws from participating in a sales system has the right to sell back all of the products, information and educational materials, product samples, or presentation kits that are capable of being resold to the organizer of the system for at least 90% of the price at which they were purchased within six months preceding the date of notifying the organizer of the resignation from the sales system.

 

Prohibition on Products

There is no specific regulation concerning the prohibition of products in direct selling. Nevertheless, some exceptions can result from regulations concerning particular industries, such as the sale of pharmaceuticals that, as a rule, are sold in pharmacies only.

According to the Act of 7 April 2022 on Medical Devices, a contract for the sale of medical devices cannot be concluded off-premises, and such a contract concluded off-premises is invalid.

Credit Restrictions Country

No specific legislation for direct selling. Direct sellers should, however, take into account the Act of 12 May 2011 on Consumer credit when dealing with consumers. The abovementioned act is a full implementation of UE directive 2008/48/WE of the European Parliament and of the Council of 23 April 2008 on consumer credit agreements. The above act covers mainly two principles: transparency and information to the consumer.

Money Collections

There are no legal restrictions concerning down payments, partial payments in advance, deposits, etc.

According to the Consumer Protection Rights Act, if a consumer withdraws from a distance or an off-premises contract (cooling-off period), the seller must, without delay, not later than within 14 days of receipt of the consumer’s withdrawal declaration, return to the consumer all payments made by them, including the costs of delivery of the goods, using the same method of payment as the consumer. Moreover, the seller must obtain the consumer’s explicit consent for any additional cost that exceeds the agreed remuneration for the principal contractual obligations.

By the new provisions of the Consumer Rights Act, implementing the Omnibus Directive as of 1 January 2023, financial services contracts cannot be concluded during a presentation or trip (does not apply to contracts concluded during presentations organized at the consumer’s home or habitual residence at their express invitation). Moreover, under the new regulations, an entrepreneur may not accept payment before the deadline for withdrawing from the contract if a contract is concluded during a trip or an unscheduled visit of the entrepreneur to the consumer’s home or habitual residence, or a presentation, unless the presentation was organized at the consumer’s home or habitual residence at their express invitation.

Licenses

No specific legislation concerning licenses for direct selling.

Direct sellers, being at the same time entrepreneurs, are obligated to register their activity in respective registers for entrepreneurs (companies in the registry of entrepreneurs in the National Court Register and independent distributors in the Central Registration and Information on Business) for social insurance and VAT purposes. Please see the comments below.

Status of Direct Sellers

There are no legal restrictions on the activities of direct sellers. Direct sellers of operating companies are either independent commission salespersons (commercial agents) or independent distributors (buy/sell dealers). Direct sellers are usually either independent entrepreneurs operating their own businesses or persons (not entrepreneurs) providing services based on a civil law contract.

Earnings Claims

No specific legislation for direct selling. The Polish DSA (PSSB), however, explicitly requires in its Code of Ethics (point 3.3.) that information provided by the entrepreneur to its direct sellers and prospective direct sellers concerning earning opportunities and other benefits and related rights and obligations shall be: (a) true, accurate, complete and presented reliably and straightforwardly; (b) based upon documented facts in the relevant market. Entrepreneurs should not communicate to prospective direct sellers any unverifiable circumstances and should not make promises which cannot be kept.

Taxes and Fees

Direct sellers – entrepreneurs

Direct sellers being entrepreneurs, are obligated to keep ‘income and outcome books’ (or to entrust an accounting agency with the task). They are also obliged to pay personal income tax (flat rate – 19% or scale tax – the tax rate in the first tax bracket is 12% up to PLN 120,000 and 32% on the excess over PLN 120,000, or lump-sum tax) and VAT (23%), with the possibility to obtain a VAT exemption, if sales for the previous year/estimated sales for the first year of activity do not exceed PLN 200,000. Direct sellers need to register for VAT purposes. Taxpayers registered for VAT must also consider if they need to register their income on a cash register (possible exemptions – for example, the threshold of PLN 20,000 of annual sales turnover, but the main rule is that a cash register is obligatory for an entrepreneur who is a VAT payer and is dealing with consumers).

As of 1 January 2022, the Entrepreneur Act indicates that the entrepreneur is obliged to ensure that payment can be made at any place where business activity is carried out, including off-premises, using, i.a., a payment terminal. This obligation does not apply to entrepreneurs who are not obliged to keep sales records using cash registers.

On the other hand, starting from 1 July 2022, an entrepreneur who provides the ability to accept payments using a payment terminal and keeps records of sales using cash registers that allow connection and data transmission between the cash register and the Central Repository of Cash Registers, shall ensure the cooperation of the cash register with the payment terminal by the technical requirements for cash registers specified in executive regulations issued under this Act.

The Polish Deal introduced many changes to the PIT Act. For example, the increase of the tax-free amount for persons using the tax scale to PLN 30,000, an increase of the second tax threshold to PLN 120,000, and liquidation of the tax deduction for health contributions – the taxpayer will pay the total 9% health contribution due. As of 1 January 2022, the health contribution rate for flat taxpayers is 4.9%. As of 1 July 2022, the possibility of deducting the obligation to Social Security exists for those who have opted for a flat tax. Taxpayers can include the health contribution as an expense or remove it from the tax base. In both cases, a deduction limit applies, which in 2023 is PLN 10,200.

The rules for using company cars for private purposes have changed as well. Moreover, there are new PIT exemptions – for working seniors, families with at least four children, and returnees.

On 1^st September 2019, a list of VAT taxpayers was launched. This means that taxpayers need to provide their bank account numbers used within the scope of their business activity to settle any transactions conducted with contractors exceeding PLN 15,000.00 (or its equivalent in another currency).

Starting from 1 January 2019, entrepreneurs operating business activity having met certain conditions may benefit from statutory preferences in the scope of payment of contributions; in particular, they can pay reduced contributions to the Social Insurance Institution (“ZUS”). Since 1 February 2020, entrepreneurs operating businesses may use “small ZUS plus” (provided they meet additional conditions).

In addition, certain reliefs and sound solutions have been introduced by the COVID-19 Act, one of the primary objectives of which is to reduce the burden and preserve the financial liquidity in companies. In ZUS, this assistance is realized, for example, by exemptions from the necessity to pay contributions or by certain specific benefits (e.g., stoppage benefits).

On 1 January 2021, the obligation to inform ZUS about contracts for specific work came into force. The Act introduced it on COVID-19. The obligation to inform ZUS rests with the payer of contributions or the individual commissioning the work. The duty applies to each contract concluded with a person with whom the payer or the natural person commissioning the work does not have an employment relationship, or if under such agreement, they do not perform work for the employer with whom they have an employment relationship, within seven days from the date of conclusion of the contract, i.e., the obligation does not apply to contracts for specific work concluded with the payer’s employee and performed for one’s employer but concluded with another entity, as well as contracts finished with persons operating business activity – for their performance of services which fall within the scope of their business activity. Importantly, agreements concluded from 1 January 2021 onwards must be reported on the new RUD form. It should be submitted (it can be done electronically via the ZUS Electronic Services Platform) within seven days of concluding a contract for specific work.

Direct sellers – non-entrepreneurs providing services based on a civil contract

They are obligated to pay income tax (12% or 32%), but such income is deducted and paid by the principal/direct selling company (tax remitter). Such direct sellers do not have to register for VAT purposes, and they do not keep ‘income and outcome books.’

Social Security

Direct sellers – entrepreneurs

As independent entrepreneurs, direct sellers are responsible for social insurance premiums. Generally, there are four types of social insurance for entrepreneurs. Three of them are mandatory, i.e., retirement (19.52%), pension (8%), accident (0.67% to 3.33% – 1.67% in 2023), and one is voluntary – sickness (2.45%). Such direct sellers have to pay also health insurance like all other entrepreneurs (no exemptions are possible). In the case of PIT paid on general rules, premiums are at the rate of 9%. Based on the provisions introduced by the Polish Deal, health insurance contributions can no longer be deducted from personal income tax advances.

For the first 24 months of operating their business activity, entrepreneurs can choose to pay reduced social insurance premiums (such reduced premiums are calculated based on 30% of the average remuneration).

Direct sellers – non-entrepreneurs providing services based on a civil contract

Such direct sellers need to be registered with the Social Insurance Office (ZUS) by the principal/direct selling company; social insurance premiums are deducted from the direct seller’s remuneration and paid by the principal/direct selling company in the same manner as in the case of employment contracts.

Others

Among other regulations on direct selling, one may name the Act of 23 April 1964 – the Civil Code.