Basic record keeping models (records of revenue, PKPiR, accounting books)
As an entrepreneur you are obliged to keep records of your business operations. The method of keeping records will depend on the legal form in which your company operates and the annual income. You can choose records of revenue, simplified accounting in the form of the revenue and expense ledger (hereinafter ‘KPIR') or full accounting.
Records of revenue
Used for the lump sum tax on registered income (see the article: A lump sum on registered income tax). It is simplified accounting form. It shall be done separately for each tax year. The records of revenue shall include only revenues from an economic activity. However, there is no need to record costs. Taxed in this form, they are not taken into account when determining the amount of tax. Importantly, all entries in the records must be properly documented by invoices, receipts and other documents supporting the establishment of a decision. One should also collect and retain evidence of purchases of goods for inspection of the tax office. Another obligation is a physical inventory (stocktake) at the end of every tax year. Records may be carried out by yourself or with the assistance of the accountancy offices. In that case, within 7 days from signing the contract, all information related to the place of storage of records should be notified to the tax office.
For whom tax revenue and expense ledger?
Tax revenue and expense ledger is used to record revenue and expenses of the taxable person for income tax purposes. It is intended for entrepreneurs who at the same time meet two conditions:
• revenue from sales for the previous year were lower than the equivalent of EUR 2 mln;
• are taxed under the general rules (18 % and 32 %) or on a linear basis (19 %).
The ledger records:
• any kind of revenues (revenue from sales and other revenue);
• purchase of commercial goods and basic materials as well as ancillary costs linked to those purchases;
• expenditure, which should be interpreted as remuneration, both in cash and in kind, and all other expenditure relating to the pursuit of an economic activity.
Revenue and expense ledger is a good solution for companies from the SME sector or sole-traders. If you decide to keep it without the assistance of an external company, it is important that it meets legal requirements regulated by the Ordinance of the Minister of Finance, where you'll find a specimen of the revenue and expense ledger and necessary instructions to its conduct.
How to keep revenue and expense ledger (KPIR)?
Keeping KPIR is subject to a number of conditions. The taxpayer shall brochure a ledger and consecutively number its copies. Ledger and evidence on the basis of which the entries shall be made, must be permanently kept in place of business or the place indicated by the taxable person as his registered office. If conducting the ledger was commissioned to accounting office - at the place indicated by the taxable person.
- Find out more about the KPIR.
- If you kept revenue and expense ledger and you want to change for lump sum on registered income, find out more how to do it.
Full accounting system
This is the most complex form of records. For example, commercial companies (i.e. companies with share capital, such as: a limited liability company, a joint-stock company irrespective of the amount of revenue) are obliged to keep full accounting records.
The obligation to keep full accounting records relates also to natural persons, civil partnerships of natural persons, registered partnerships of natural persons and professional partnerships, if their net revenue from the sale of goods, services and financial operations for the preceding financial year reached at least the equivalent in the Polish currency of EUR 2 million, and other legal persons, with the exception of the State Treasury and the National Bank of Poland.
Full accounting means more responsibilities for an entrepreneur than in the case of simplified accounting. In addition to the bookkeeping and additional records (e.g. fixed assets, stock records), it includes a financial statement. Some operators shall draw up a cash flow statement and statement of changes in equity and are subject to financial audit by a statutory auditor.
The entity keeping books must be in possession of documentation describing in Polish adopted accounting rules (policy), and in particular relating to the financial year and reporting periods; methods for the valuation of assets and liabilities and determination of the financial result and the manner of bookkeeping, as well as a description of the data protection system and its collections..
The accounting books should be carried out diligently, faultlessly and on regular basis.
- What kind of records should I keep when settling in the form of tax card?
- How to keep records when accounting on a general basis?
Check the explanations of the Ministry of Finance concerning the period of storage of documents relating to activity.