How to switch from accounting books to simplified accounting (tax revenue and expense ledger)

From 1 January 2017, owing to the change in the Accounting Act the limit of revenue to which entrepreneurs will be able to keep a revenue and expense ledger (PKPiR) has been increased to EUR 2 mln.  The exchange rate, to which conducting full accounting on the basis of the Accounting Act will not apply in 2017 amounts to PLN 8 595 200 (EUR 2 000 000 x PLN 4,2976). 

Thus, if in 2016: 

  • you conducted economic activity individually or in the form of civil partnership of natural persons, in the form of a registered partnership of natural persons, in the form of a partnership, and
  • the net revenue (without VAT) from your individual business activity or company's revenues were lower than PLN 8,595.200 (EUR 2 000 000), and
  • in 2016 you conducted accounting books according to the Accounting Act,

from 1 January 2017, you may decide not to keep accounting books and start simplified accounts in the form of a revenue and expense ledger. 

Remember:  Resignation from carrying out accounting books is your right, not an obligation.  If you don't exceed the limit of EUR 2 million and in 2017 you also want to keep accounting books — you have the right to do so.  However, you must inform the competent head of the tax office until 31 January 2017.

What to do when switching from a full accounting to revenue and expense ledger (PKPiR) since 2017.

If you decide to resign from keeping a full accounting, bear in mind that you should, inter alia: 

  • close the accounting books at the end of the financial year,
  • agree balances and prepare financial statements. 

In addition, if you do business in the form of a registered partnership of natural persons or in the form of a partnership and company resigned from full accounting, the head of a firm should submit with the registry court carrying out the National Court Register, within 6 months from the end of the financial year (i.e. until 30 June 2017), a declaration of the absence of the obligation to draw up and submit financial statements.

Revenue and expense ledger (PKPiR) obligations

You will have to draw up a physical inventory of all commercial goods, core and ancillary materials,  semi-products, work in progress, finished products, deficiencies and waste as at 1 January 2017 and their value according to purchase price or the acquisition or development of market prices of drawing up the inventory, if they are lower than the prices of the purchase or acquisition; in turn, the value of semi-finished products, finished products and deficiencies own production is valued at production cost, the value of commercial waste that in the course of business lost their original value in use — by value according to estimate taking into account their suitability for further use.  The total value resulting from the physical inventory should be introduced to the revenue and expense ledger.  The pursuit of fiscal books of receipts outflows from 1 January 2017 you must inform the head of the tax office competent according to the place of residence.  You should do so within 20 days from the date of its establishment, (in practice until 23 January 2017).

You can delegate PKPiR to accounting office.  You must also inform the head of the tax office within 7 days of the conclusion of the contract with the accounting office, indicating the name and office address, place(address) of storage of books and evidence (invoices, bills, other documents) relating to its conduct.  Notification of the choice of the accounting office.

How to notify the tax office of the opening of accounting books

Notice of initiation of keeping revenue and expense ledger can be  submitted to the office in person, by post (you will find applications on the websites of office) or online by the so-called general letter. 

If you conduct activity registered in CEIDG, notification amend the entry in the CEIDG, where section 20 ‘Type of accounting records" should mark the No 2 ‘tax revenue and expense ledger". 

Transition from a full accounting system to simplified accounting is not a complex process, but it requires establishment of a specific type of records which are not required in the accounting books.  You will find them below. 

  • Equipment records 
  • Inventory of tangible and intangible fixed assets. 
  • Recors of staff revenue. 
  • Sales records — applies if you delegated revenue and expense ledger to an accounting office, if you earn revenues not documented by invoices or receipts. 
  • Additional records — if you are engaged in the activity of pawnbroking you will have to also record loans and pledged goods;  if you run currency exchange office, you must keep ‘records of buying and selling foreign currency' in accordance with the principles set out in the foreign exchange law. 

See more on records in PKPiR

Before you implement a revenue and expense ledger  you should familiarise with the rules for its conduct laid down in the Regulation of the Minister of Finance of 26 August 2003 on the conduct of revenue and expense ledger.

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