Invoices in unregistered business activities – tax rules and obligations

Invoicing in the context of unregistered business activity is an issue that raises many questions amongst budding entrepreneurs who decide to carry out small-scale gainful activity without registering with the CEIDG. Clarifying the mechanisms for documenting sales, tax and record-keeping obligations, and the nuances surrounding VAT exemption or the need to account for VAT is crucial to avoiding errors and potential tax consequences. In this paper, I present a detailed and practical guide to invoicing in the context of unregistered business activity, taking into account current legislation and administrative practice.

Unregistered business activity – essence and conditions for conducting such activity

Unregistered business activity, also known as unreported business activity, enables individuals to legally earn income from small-scale gainful activities without formally registering a business. The basic condition is that the monthly income limit must not be exceeded – in 2025, this stands at PLN 3,499.50 gross (75 per cent of the minimum wage). Exceeding this threshold triggers an obligation to register the business within 7 days.

Additional conditions are:

• not having carried out any business activity in the last 60 months;
• carrying out business activities only in areas that do not require a licence, permit or entry in the register of regulated activities;
• keeping simplified sales records;
• compliance with consumer rights (including the right to withdraw from a distance contract and the handling of complaints);
• declaring income in the annual PIT-36 tax return.

Documentation requirements: invoice, receipt, records

When and to whom should an invoice be issued?

In the case of unregistered business activity, there is no obligation to issue an invoice for every transaction. Sales are recorded in simplified sales records. An invoice (or receipt) is issued:

• at the express request of the customer (whether a consumer or a business);
• within 3 months of the end of the month in which the sale took place, the service was provided or payment was received (in full or in part).

In practice, this means that the customer has the right to request an invoice up to 3 months from the end of the month in which the sale took place. After this period has elapsed, issuing the document is optional.

Mandatory elements of a VAT-free invoice

If you are not a registered VAT trader, you issue an invoice without VAT. It should include:

• the date of issue,
• the sequential invoice number (in accordance with the chosen numbering system),
• the full name and address of the seller and the buyer (the address is required by law, although in practice some platforms allow it to be omitted),
• the name of the goods or services,
• the measure and quantity of goods supplied or the scope of services provided,
• unit price,
• the total amount due.

There is no obligation to provide a tax identification number (NIP) or personal identification number (PESEL); however, if you have a tax identification number (e.g. from a previous business or because you have a cash register), you may include it voluntarily.

On a VAT-exempt invoice, you may (but are not required to) state the legal basis for the VAT exemption, e.g. ‘Exempt from VAT pursuant to Article 113(1) of the VAT Act’.

VAT invoice – when is it required and how do you issue one?

The obligation to issue VAT invoices arises only if you are registered as an active VAT taxpayer. In the case of unregistered business activity, this may result from:

• voluntarily waiving the VAT exemption based on the nature of the business,
• statutory requirements – e.g. the sale of goods or services excluded from the right to exemption (legal services, consultancy services, jewellery, excise goods, electronic equipment).

The VAT registration process involves submitting the VAT-R form and (if you do not already have one) obtaining a NIP number via the NIP-7 form. Once registered, you must keep VAT records and submit VAT returns and JPK files.

A correctly issued VAT invoice must include:

• the date of issue,
• a unique invoice number,
• the full name and address of the seller and the buyer,
• the seller’s and buyer’s NIP numbers (in the case of a business),
• the date of the sale/service (if different from the date of issue),
• name of the goods/services, quantity, unit of measurement, net price, discounts,
• net value, VAT rate, VAT amount, gross value,
• sales totals by VAT rate, and the amount of tax on the net sales total.

A VAT invoice issued by a person who is not registered but is registered as an active VAT taxpayer entitles the purchaser to deduct VAT under the general rules, provided that the purchase relates to a VAT-taxable activity.

Receipt versus invoice – differences

In unregistered business activities, sales may be documented using either a receipt or an invoice (depending on VAT status and the purchaser’s requirements). A receipt does not contain information on VAT and its use is permitted for VAT-exempt sales. In practice, these terms are sometimes used interchangeably, but for tax and accounting purposes it is important to use the correct type of document.

Unregistered business and VAT – exemptions, registration, consequences

Subject-based VAT exemption

Basic rule: if the annual turnover does not exceed PLN 200,000 (from 2026 – PLN 240,000), a person carrying out unregistered business activity may benefit from a VAT exemption based on turnover. The limit is calculated on a pro rata basis if the business was started during the year.

Exceptions – the obligation to register for VAT from the first transaction arises, amongst other things, in the case of:

• the sale of precious metals and excise goods (with the exception of electricity, cigarettes and selected cars),
• the sale of cosmetics, electronics, domestic appliances and computers,
• the provision of legal, consultancy, jewellery and debt collection services.

In these cases, there is no VAT exemption regardless of turnover, and VAT registration is mandatory before carrying out the first taxable transaction.

Consequences of invoicing errors

Issuing a VAT invoice without being registered as an active VAT taxpayer results in an obligation to pay the tax shown, together with interest, despite the purchaser not being entitled to deduct it. Failure to issue an invoice (or receipt) at the customer’s request within the statutory time limit exposes the business to criminal and fiscal penalties. Furthermore, from the date on which the revenue limit for unregistered business activity is exceeded, regardless of the form of documentation, there is an obligation to register the business and notify the Social Insurance Institution (ZUS).

Invoicing practice – tools, formats, archiving

Invoices and receipts may be issued in any form – both on paper and electronically (PDF, e-invoice). It is permitted to use simple spreadsheets, templates in Word/Excel or invoicing applications (e.g. Fakturownia, Sky-Shop, firmly). It is important that the document contains all the elements required by law.

Invoice numbering should be logical and clear – e.g. 1/2025, 2/2025, etc. In the case of unregistered business activity, there is no obligation to sign invoices. It is mandatory to retain sales documents for 5 years for tax purposes.

The National e-Invoice System (KSeF) – new challenges

From 2026, even unregistered businesses that decide to issue e-invoices will have to use the KSeF. This system enforces a specific structure and format for sales documents, as well as their electronic submission to the tax authorities. In practice, this means that compatible invoicing software must be used, or invoices must be generated in XML format.

Record-keeping obligations and tax returns

Simplified sales records are mandatory – they may be kept in a notebook or a spreadsheet. Each sale must be recorded no later than before the next sale is made on the following day. The records must include, amongst other things, the date of sale, the value of the sale and the cumulative total for the relevant period.

Income from unregistered business activities is declared on the PIT-36 form in the section relating to unregistered business activities. Income tax is paid as a single payment at the end of the tax year. Expenses related to the business may be claimed as tax-deductible costs – however, this requires appropriate documentation (invoices, bills, receipts).

Cash registers and other formal obligations

Most people carrying out unregistered business activities are not required to use a cash register if their annual turnover from sales to private individuals does not exceed PLN 20,000. This requirement applies to certain sectors (e.g. vehicle repairs, hairdressing and beauty services) regardless of turnover, and in cases where sales are made in cash rather than by bank transfer.

Practical examples

• Kasia runs an unregistered business as a photographer. Her annual income is PLN 30,000, and her costs for equipment and licences amount to PLN 8,000. Her net income of 22,000 PLN is taxable according to the tax scale in the PIT-36 form.
• Mr Tomasz provides consultancy services without registering a business. As consultancy services are excluded from the VAT exemption, he must register as a VAT-registered trader before making his first sale, and every invoice must include his tax identification number (NIP) and show the VAT amount.

Common mistakes and pitfalls

• Issuing VAT invoices without being registered as an active VAT taxpayer – results in the obligation to pay tax and the purchaser being unable to claim a deduction.
• Failure to issue an invoice by the deadline requested by the customer – may lead to criminal and fiscal penalties.
• Using the incorrect document template – the absence of required elements may result in the cost being disputed by the contracting party or the tax authority.
• Inaccurate sales records – in the event of a tax audit, the tax authorities will determine the tax base themselves, often to the taxpayer’s disadvantage.

Summary

Running an unregistered business and issuing invoices are key considerations for those starting to earn income on a small scale. It is essential to:

1. To closely monitor income and be prepared to register a business once the threshold is exceeded.
2. Issuing invoices/bills at the customer’s request, whilst ensuring they contain the required formal elements.
3. Distinguishing between tax statuses (VAT exemption vs. active VAT taxpayer) and using the correct document templates.
4. Keeping simplified sales records and retaining documentation for the required period.
5. Complying with the regulations concerning KSeF from 2026 onwards.

If you have any doubts regarding correct invoicing or tax settlements, it is worth considering consulting a tax adviser or using dedicated online tools that help to avoid formal and tax-related errors.