Accounting Poland

WHY POLAND IS WORTH INVESTING?

If you are looking for best place to start your business you should choose Poland.

Why? Here, we show you more than 10 reasons for location of your investment in one of the biggest Polish cities like Warsaw, Krakow or Wroclaw.

1. CENTRALLY LOCATED
Central location of Poland makes it considered the „Heart of Europe”. It's a excellent location for businesses that target both Eastern and Western part of the continent.

2. SUCCESSFUL ECONOMY
The Polish economy is considered one of the fastest growing economies in Europe.

3. POPULATION
The consumer market in Poland is large (ca. 40 M people).

4. QUALIFIED AND COMPETITIVE LABOR FORCE
There are about 430 higher education institutions in Poland so Highly-qualified workers and well-educated specialists are available easily. Academic centers produce a large number of graduates. We can find a lot of experts in modern technologies, IT and other technical fields. Polish engineers and scientists are very appreciated in the world. Most of Poles (especially young) speak foreign languages.

5. LABOUR COSTS
In comparison to other European countries Labour costs are still much lower.

6. POLITICAL STABILITY BASED ON EU AND NATO MEMBERSHIP
Thanks to its membership in NATO and the European Union, Poland is a country with a confirmed history of political stability and commitment to the principles of a free market.

7. LARGE DOMESTIC MARKET
Poland is now one of the biggest EU member states, joined the EU on 1st May 2004. It’s the biggest market in Central and Eastern Europe and 6th most populated country in the EU. The average economic growth for European countries equal to 1.9%, while Poland’s was 5.1% in 2018.

8. POLAND IS THE BIGGEST BENEFICIARY FROM THE EU BUDGET
Approximately 82.5 billion euros for the cohesion policy and 32.09 billion euros for agricultural policy that's the amounts that Poland will receive from the EU's budget between 2014 and 2020.

9. STEADILY IMPROVING CONDITIONS FOR RUNNING BUSINESS
Poland was considered the greatest improver in terms of ease of doing Business by The World Bank’s reports ‘Doing Business 2010–2017’.

10. POLAND AS ONE OF THE TOP COUNTRIES IN UNCTAD’S WORLD INVESTMENT PROSPECTS SURVEYS 2014 - 2016 Bagrupp Poland was graded as 13th top prospective host economy for FDI in the World, and 4th in Europe in 2014-2016 by The UNCTAD’s World Investment Prospects Surveys. Poland was also ranked as the 20th global receiver of FDI and the 10th amongst developed countries in 2014 per the World Investment Report 2015.

LEGAL FORMS OF BUSINESS IN POLAND

The number of foreign entrepreneurs doing business in Poland is still growing and makes it a promising country for investment.

The first of all you should choose the appropriate legal form to start your business with. Bagrupp Below you can find a brief description and characteristics of each type.


LIMITED LIABILITY COMPANY (LLC)

The main trait of the LLC is to guarantee that the company is reagarded as the separate legal entity from its shareholders or sole shareholder. The shareholders of the entity are not personally responsible for the company’s debts. Foreign investors often choose this legal form.

Other advantages of the LLC:
One or more person or/and entity may incorporate The LLC. Ownership of 100% of shares by another single-shareholder LLC is not prohibited by the Polish law, the minimum share capital for LLC is the amount of 5k PLN with the minimum nominal value of 50.00 PLN per each share. Shareholders can make contributions in cash or in kind.
Three governing bodies the limited liability company may have: In case the company has more than 25 shareholders and if its share capital exceeds 500,000.00 PLN the latter is required.

The Management Board duties: One or more members (no difference whether Poles or foreigners), that can be appointed from the shareholders or from third persons may form The Management Board.
The General Meeting of the Shareholders consists of the shareholders. The resolution of the General Meeting of the Shareholders makes appointment of The Supervisory Board made of at least three members. The Supervisory Board exercises permanent control over all areas of the company’s activities.
The shareholders can only lose their investment (monetary contribution or in-kind contribution invested to take up the shares in the share capital of the company) but they are not liable for the company’s debts or obligations personally.


JOINT-STOCK COMPANY / PUBLIC LIMITED COMPANY (PLC)

The provisions stipulated by the Code of Commercial Companies are more formalistic than in a limited liability company and the bodies of the company must fulfill additional obligations, but regarding the liability of shareholders PLC is very similar to LLC. This legal form is used for business planning IPO (Initial public offering), searching for PE (private equity) /VC (Venture capital) investors or by Polish law (e.g. banks, pension funds and other financial institutions) when this form is required.
As Polish law says the minimum share capital of PLC must have an amount of 100k PLN and the minimum nominal value of the stock must be 0.01 PLN.
Governing bodies of the joint-stock company: Stockholders create The General Assembly who exercises the rights stipulated in the Code of Commercial Companies and the statute. Within six months of the company's financial year an Annual General Assembly must be called and law stipulates the items on the agenda.

The Supervisory Board and Management Board have almost the same features, duties and obligations as in case of a LLC. The stockholders of the PLC are safe because they are not liable for any debts and any obligations of the company. All they can risk is their investment (e.g. monetary contribution or in-kind contribution invested to take up the shares in the share capital of the company).


GENERAL PARTNERSHIP
A general partnership is an enterprise under its own business name operated by the association of at least two partners. The partnership agreement stipulates the rights and obligations of the partners.
The liability for debts of the General Partnership is unlimited for each partner.


LIMITED PARTNERSHIP

Unlimited liability for the general partners and restricted liability for limited partners, due to their fixed partnership contributions.


LIMITED LIABILITY PARTNERSHIP

A limited liability partnership is used by professionals (such as lawyers, tax advisors or doctors). It's a partnership incorporated for the purpose of rendering professional services. The professional activities of other partners are not incurring the obligation of the partnership and other partners liability.


PARTNERSHIP LIMITED BY SHARES

This form of activity is rarely used. It has to have a General partner - at least one partner with unlimited liability and a stockholder - at least one partner. Bagrupp

LIMITED LIABILITY COMPANY

The most popular company in Poland is a Private Limited. Its structure has many advantages, however it has also a lot of disadvantages.

Advantages: Disadvantages:

ESTABLISHING AND REGISTERING AN ENTITY

At the beginning of the incorporation na entity you have to choose the appropriate legal form. Probably the most beneficial form for foreign investors starting businesses in Poland are limited liability company or public limited company.
Therefore, the following explanations will focus on the hereinabove.


Procedure - The limited liability company or public limited company

1. NOTARIZE COMPANY AGREEMENT The traditional manner in front of a Polish notary is for the investors that wants to start company with more complex and sophisticated structures.

2. DEPOSIT PAID-IN CAPITAL AT THE BANK

A bank account is one of the requirements all companies in Poland have to fulfill to start a business. Depending from the bank required documents may be different.

Before submitting the documents to the court the LLC must pay the full initial capital of the company and the PLC must pay at least in 25%.

3. FILE FOR COMPANY REGISTRATION AT THE NATIONAL COURT REGISTER

Tax identification number (NIP) and statistical number (REGON) is given automatically to newly founded companies soon after registration in the National Court Register. It determines the creation of a new business entity and is binding for other authorities such as: Tax Office, Statistical Office and Social Insurance Office. Bagrupp The branch office get its own KRS number.
The National Court Register offers online registration, see point 1b).
The costs to establish an LLC are: PLN 500 for registration and PLN 100 for publication in the official court bulletin.

4. REGISTER FOR TAXES AND VAT

A new form (NIP-8) is required to file for newly registered business entity. It contains supplementary data with the head of the tax office within 21 days after the entity is initially entered in the National Court Register.

Registration for VAT is a must for a new company. It should be in the Tax Office by the date when the company carries out VAT- covered business activities for the first time. VAT-R, confirmation of company registration at the National Court Register (KRS) and information on the address of its registered office are the essential things the company must provide.

Required for the companies that are planning to make foreign trade activities in the European Union in the future. To start commencing foreign trade activity within the European Union the company must submit the application, but first of all the company must register as a regular VAT taxpayer.

There is no fee for income tax registration, but for VAT registration is paid PLN 170 (If you want to have confirmation of register for VAT).

5. EMPLOYEES

If you will hire employees you must: Registration is free of charge.


Procedure - Sole Proprietorship

Registration of self-employed business is much easier to register at the appropriate town or voivodeship administrative office.
Applying for an entry into the register of trade is what you have to do at the beginning of registering your business. Choosing one or more categories from the classification of activity is next. You also apply for a REGON number (which is used on other forms so you will not do anything without it) and a tax number (NIP).
Then you have to register at the ZUS (social insurance) and if you need it register your business as a VAT taxpayer (VAT-R) at the tax office.

Business and Information Central Register (CEIGD) is the place where you have to registrate your business activity if you are a natural person. CEIGD-1 form is available via the Internet (https://prod.ceidg.gov.pl/) or at the office.

As soon as you fill the forms business activity can be started. However, it can be a different (later) date of commencing the business and it is specified in the application .

TAXATION

Bagrupp Both direct and indirect taxation exist in Poland.
The DIRECT group includes the following types of tax: The INDIRECT group – where tax is included in the cost of goods or services covers:
  • income (PIT and CIT),
  • civil law transactions,
  • other e.g. inheritance and endowment, real estate, agricultural, forestry, means of transport.
  • VAT (Tax on Goods and Services),
  • Excise tax.
Polish tax system is compliant with EU regulations since Poland joined the European Union on the 1st of May 2004.
Income tax

The Corporate Income Tax Act referred to as ‘CIT’ (for limited liability companies or joint-stock companies) is covering the income tax. Which act we should follow is determined by the type of taxed entity.
Income source Tax rate
incomes of capital companies and limited joint stock company, 19% or
9% for smaller taxpayers (i.e. taxpayers whose value of sales revenue – including the amount of VAT due – did not exceed in 2018, the amount corresponding to the equivalent of EUR 1.2 million) and for those starting a business.
  • share in capital company profits, i.e. dividends (withholding tax),
  • interests,
  • business activity (self-employed) – after the declaration of the linear taxation.
19%
Personal income tax (PIT)

A natural person may become the resident of Poland if Poland is its place of residence. Poland becomes a place of residence for a foreigner if he stays on its premises for more than 183 days in a calendar year.Then the resident becomes a tax resident and his worldwide income is a subject for Polish taxation.
Persons temporarily staying in Poland for more than 183 days do not have to be taxed as residents if they are employed by a company established with foreign participation or by a Polish representative office of a foreign enterprise or bank.

A non-resident is a person who lives in Poland for less than 183 days (except in the cases mentioned above). Non-residents are subject to tax only on income from Polish sources. The salary for work performed in Poland is considered income from Polish sources, regardless of where the salary is paid. Poland has concluded a number of agreements on the avoidance of double taxation with other countries that avoid double taxation of income.
  • employment contracts,
  • business activity (self-employed) unless the linear taxation is declared,
  • activity performed personally (e.g. members of board of directors),
  • rental,
  • civil law agreements.
18% up to 85,528.00 PLN and 32% of the surplus over 85,528.00 PLN.
Tax on civil law transaction

Tax on civil law transactions depending on business activity, applies as set out below:
Activity Tax rates
  • articles of incorporations of capital companies and partnerships,
  • increase of the capital or contribution in a partnership,
  • loan granted by a partner to a partnership,
0.5%
  • sales or donation of property (including immovable property),
2%
  • sales of certain financial rights, including shares,
1%
  • loans granted by shareholder to capital company,
  • loan agreements.
exempt
14 days from the transaction date is the time we need to pay the tax for civil law transactions.


Value added tax

Value Added Tax Act (VAT) is classed as either: or There is a standard VAT rate of 23% in Poland since 2011. However, some goods/ services are either exempt or a reduced VAT rate is applied.
Activity Tax rates
all besides below mentioned, 23%
Following goods and services:
  • certain agricultural related services,
  • processed food such as sugar, soups, sauces,
  • passenger transport,
  • pharmaceuticals and medical equipment,
  • construction and supply services for houses and apartments classified as social housing,
  • all catering and restaurant services except for the supply of beverages,
  • newspapers and magazines,
  • communal services.
8%
Food produce such as dairy, meat, poultry and fish, 5%
  • export of goods,
  • intra-community delivery of goods,
  • international transport,
0%
  • supply of goods used only for activity exempt from VAT,
  • financial services.
exempt
There is no need for a VAT registration for companies with annual turnover below 200,000 PLN in Poland.
The company that exceeds its turnover to more than 200,000 PLN must register in a local Polish tax and provide the registration number. The head of the Tax Office must be notified if an entrepreneur intends to perform intra-community transactions, of such intention prior to the first supply or acquisition of goods to or from another company in an EU member state. The notification is completed by submitting form VAT-R.

JPK VAT

JPK VAT file contains a list of all purchases and sales of VAT, monthly submitting of this form is involved in this obligation.
Submitting JPK records must be done in electronic form with an electronic signature by all the entities required. Download of UPO file (official confirmation of receipt sent by the office) confirms sending a JPK. The Ministry of Finance provides the client application required to send JPK files, together with an instruction manual containing instructions for installation and operation of the JPK client application as well as a sample JPK_VAT_002.csv file.

JPK on demand includes several components, among others:
Penalties

Penalties for violations and tax offenses are more and more strict. We need to avoid Errors in tax settlements, because it may costs us a lot. The basis for imposing penalties are failures of filing JPK, delays of sending, and other errors made by taxpayers. Not sending properly filled JPK might end up with a penalty fee of 2800 PLN.
Any person who fails to submit the information within the required deadline is subject to a fine in a height equaling up to 120 daily rates. Rates are determined individually by the court - in 2017 the maximum penalty could reach more than 3 000 000 PLN. So it is always more safe to hire a good bookkeeping company in Poland.
If you want to avoid financial penalties on your own without professional accounting, you should equip your company with the appropriate software that will safely implement all the changes happening within the tax regulations or simply turn to the services of a professional accounting office in Poland.

IMPORT, EXPORT, WNT AND WDT GOODS

Polish entrepreneurs recently started to export their goods and are entering foreign markets increasingly. The goods imports from foreign contractors are also becoming more and more popular. According to statistics foreign trade is growing every year. Such transactions are subject to separate VAT regulations.

First of all we need to explain the definitions of territories:
The territory of the country is recognized as the territory of the Republic of Poland. On the other hand, the territory of a Member State (Article 2 (4)) is the territory of a State forming part of the territory of the European Union. The territory of the European Union is the territory of the Member States of the European Union, except for the purposes of applying the VAT Act (Article 2 (3) of the Act):
  1. The Principality of Monaco is treated as the territory of the French Republic; the Isle of Man is treated as the territory of the United Kingdom of Great Britain and Northern Ireland, the sovereign zones of Akrotiri and Dhekelia are treated as the territory of the Republic of Cyprus,
  2. the following territories of each Member State shall be treated as excluded from the territory of the European Union:
    • the island of Helgoland, the territory of Buesingen - from the Federal Republic of Germany,
    • Ceuta, Melilla, Canary Islands - from the Kingdom of Spain,
    • Livigno, Campione, Italia, the Italian part of Lake Lugano - from the Italian Republic,
    • French territories referred to in art. 349 and Art. 355 sec. 1 Treaty on the Functioning of the European Union - from the French Republic,
    • Mount Athos - from the Hellenic Republic,
    • Åland Islands - from the Republic of Finland,
    • Channel Islands - from the United Kingdom of Great Britain and Northern Ireland.
  3. Gibraltar is treated as excluded from the territory of the European Union.
The territory of a third country is the territory of a country not part of the territory of the European Union.


Uniform Administrative Document
For international trade procedures export, import, transit a universal statistical customs document SAD (Single Administrative Document) is used. SAD applies to all goods, regardless of their type and origin.

Import of goods

The import of goods from a third country territory within the European Union (Article 2 point 7 of the VAT Act). The information is contained in the SAD document. VAT and customs duties are paid by the buyer.

A Polish company is obliged to pay VAT if it buys goods from Russia or the United States. The base of taxation on the import of goods is: It is possible to deduct VAT on the VAT-7 declaration for VAT on imported goods by a Polish company.


Export of goods

Is the delivery of goods dispatched or transported from the territory of the country (from Poland) outside the territory of the European Union. The customs office specified in the customs office must confirm the export of goods outside the European Union.

The taxpayer have to accept a preferential rate of 0% for export, the VAT must meet conditions related to the export of goods below: Export must be documented with acts below:
ECS system

Customs officials in the European Union use this Community system to exchange export declarations and exchange information. Bagrupp Bagrupp
Intra-community acquisition of goods (WNT)

Goods imported from the area of another EU country to Poland are example of Intra-community acquisition of goods (WNT).

The value of purchase from abroad should be presented in the VAT-7 declaration in the section of revenues and costs, similarly as in the case of a VAT charge as VAT due and VAT calculated. This may seem quite unusual due to the fact that import is a purchase, so you should mark it as the cost of the company.

The buyer of goods from abroad is obliged to settle VAT, although it is not on the invoice from the contractor. The Polish importer must show the VAT-7 value of purchase and VAT in revenues and costs. This causes the transaction VAT to be nil as on the invoice.
To determine the tax base, the amount should be converted into PLN. The conversion takes place according to the average exchange rate of the National Bank of Poland from the last business day preceding the tax commitment day (Article 31a of the VAT Act).
To calculate the tax base, the rate from the day preceding the invoice issue date is used, because in this case the tax liability arises on the day the invoice is issued.

A company purchasing goods from EU territory must report to the tax office on VAT-R printing as an EU VAT taxpayer.


Intra-Community Delivery of Goods (WDT)

Export of goods from Poland into another EU country is an example of Intra-Community Delivery of Goods (WDT)

The sale of goods in the European Union is taxed on a preferential basis, like a zero rate of value added tax. In practice, a trader who sells his products to other EU countries issues VAT invoices at a zero rate and at the same time retains the right to deduct VAT from costs. Taxation of goods in the European Union takes place on preferential terms - it is a zero rate of value added tax. In practice, the entrepreneur retains the right to deduct VAT from costs by invoicing contractors from other EU countries at zero rate. Then, the Tax Office is obliged to refund the tax within 60 days of submitting VAT-7. Bagrupp Here: http://ec.europa.eu, you can check if your contractor is registered for EU VAT (or is it an EU VAT taxpayer). If you want to get a VAT refund, contact with the Polish accounting company which will help you with your responsibilities.

The carrier (forwarder) is obliged to provide export documents such as: delivery confirmation, specification of individual items of cargo and must be received by the seller before the deadline for submitting VAT returns. E-mails from contractors, descriptions of delivered goods, cargo insurance documents and payment confirmations by the buyer may also be such documents (Article 42, sections 3-11 of the VAT Act).


VAT-EU

VAT-EU information provides information on purchases and sales within the European Union. It is more informative than an accounting document.


Who is required to submit VAT-EU information?

All taxpayers who register as companies performing intra-community transactions. That are: active VAT taxpayers and exempt taxpayers who are registered for intra-Community transactions.

VAT-EU information is required to submit taxpayers who: There is no need to present such transactions in the VAT-EU information if the company in the given period imported services from a contractor from the territory of the European Union. Until the 25th month following the month in which the information was submitted, a VAT-EU declaration must be submitted to the tax office. Everything is settled in electronic form.
The foreign contractor is also checked by the tax office in respect of submitting its VAT declaration in the EU. Any differences should be clarified by providing relevant documents to the tax office.

INTRASTAT

If an enterprise exports or imports goods exceeding a given threshold on EU territory it is obliged to report its trade flows.

For 2019, the following threshold values ​​were established:
  1. Basic threshold:
    • for the import of 4,000,000 zł,
    • for export 2,000,000 zł.
  2. Detailed threshold:
    • for the import of 65,000,000 zł,
    • for export 108,000,000 zł.
Bagrupp The person obliged to submit the INTRASTAT declaration should first submit the INTRASTAT declaration for the reporting period in which the value of imported or exported goods exceeded the statistical threshold specified for the entity.

The entity whose value of imports or exports exceeds the basic threshold bypasses in the INTRASTAT statement: From the first of January 2016 electronic INTRASTAT declaration are available as part of e-INTRASTAT services, implemented by AIS / INTRASTAT system. More information: https://puesc.gov.pl/en/e-intrastat.

In justified cases, it is also possible to submit an application in a traditional, paper form, but the customs authority must be informed in advance.
It should be remembered that INTRASTAT must be made within a period not longer than by the 10th day of the month following the reporting month. Applications can be made using the program inst @ t, here is a link from the Ministry of Finance download)
If you have any questions related to the operation and operation of the INTRASTAT system, you can contact the INTRASTAT system Helpdesk by e-mail address: helpdesk.intrastat@kat.mofnet.gov.pl.

If, on the other hand, questions arise regarding issues related to the provisions regulating the INTRASTAT application, please contact:
  1. INTRASTAT Department in the Customs Chamber in Szczecin to the e-mail address: intrastat.ic-szczecin@szc.mofnet.gov.pl.
  2. Customs Information Center (InfoSC) to the e-mail address: info.sluzbacelna@kat.mofnet.gov.pl.

THE ANNUAL TAX RETURN FORMS

PIT-16A

This is a option for taxpayers who submit a tax card. To use this method you must submit two forms: PIT-16 and PIT-16A. PIT-16A contains information about national health insurance contributions paid and deducted from the tax card in each month of the tax year. The deadline for submitting the declaration for the previous tax year is January 31st.


PIT-28

This is an option for taxpayers who settle on a flat-rate related tax. Such income is, for example, income from renting a car or a small company. The deadline for submitting the declaration for the previous tax year is January 31st.


PIT-36

This is an option for taxpayers who, regardless of their income sources, deal with:
  1. Conducting non-agricultural activities taxed on the basis of general principles of the tax scale.
  2. Receiving income:
    • from letting, subletting, leasing, subleasing and other similar agreements settled on the basis of general principles,
    • from personal responsibility for paying the advance tax in relation,
    • from located outside Poland income sources,
    • eg. winning a prize taxed on the basis of general rules and if none of the taxpayers concerned is obliged to pay the advance tax.
In the case of this document, the entity shows tax revenues from various sources. It may also be a full-time job, however, income taxed using a lump sum, tax card or flat tax can not be settled in this way. Hence, persons covered by PIT-36 are NOT required to fill in PIT-37.
The deadline for submitting the declaration for the previous tax year is April 30th.


PIT-36L

This is an option for taxpayers who pay linear income tax such as: You can not combine income from various sources in this tax return. A person that worked in a full-time job must fill in and submit PIT-37 additionally.

The deadline for submitting the PIT-36L for the previous tax year is April 30th.


PIT-37

This is an option for a taxpayer who settles within the general rules (according to the tax scale), and his income is paid exclusively by the employer. Bagrupp In PIT-37, the income taken into account comes from employment under a contract with companies based in Poland.

The deadline for submitting the declaration for the previous tax year is April 30th.


PIT-38

It is an option for taxpayers who obtain capital gains from purchased shares (i.e. dividends) or deal with the sale of: The deadline for submitting the declaration for the previous tax year is April 30th.

FIXED ASSETS, INTANGIBLE ASSETS, AMORTIZATION

What are fixed assets?
Bagrupp However, they must meet the conditions below:
If the assets meet the relevant conditions, the taxpayer is obliged to recognize the asset in the fixed and intangible assets register. An additional condition is to keep records of fixed assets.
What is the Register of Fixed Assets?

It is a document in which the following data must be filled in:
  1. Name and surname.
  2. Address and Taxpayer NIP.
  3. Give the year for which the records are kept.
  4. Order number and Date of purchase.
  5. Date of admission to use.
  6. Identify the document on the basis of which you can identify the acquisition.
  7. Determination of fixed assets or intangible assets.
  8. Symbol CFA (Classification of Fixed Assets).
  9. Initial value.
  10. Depreciation rate.
  11. value of improvement.
  12. Updated initial value.
  13. Amortization Amounts for a given tax year and cumulatively for the period of making such write-offs.
  14. Date of liquidation of a fixed asset.
  15. Cause of liquidation of a fixed asset.

What constitutes intangible assets?
Bagrupp Purchases of fixed assets or intangible assets are not posted directly in the company's costs, but are depreciated.


What is depreciation?

It is the settlement of funds spent on the purchase of a fixed asset over time.

One-time (disposable) amortization is also possible if: The provisions of the Act explicitly list the categories of fixed assets to which the depreciation solution applies. Their regulations show that one-off depreciation in the limit of 100,000 PLN applies only to brand new fixed assets from groups 3-6 and 8 of the KŚT. Thus, it does not apply to intangible assets at all, as well as fixed assets from the grouping of 1-2 KŚT, i.e. buildings and premises as well as civil and water engineering structures, as well as to the whole group of 7 KŚT, i.e. all means of transport.


What is de minimis relief for businesses with one-off amortization?

The provisions on de minimis aid mention that for 3 years the amount of aid does not exceed a total of EUR 200,000. For transport companies it will be 100,000 euro.

The taxpayer can decide for himself whether he wants to use this type of depreciation. If the taxpayer makes a one-off depreciation, he needs a certificate to use this form of de minimis aid.

In order to receive such a certificate, the entity must ask the head of the tax office to issue it and submit the following documents:
How to value the asset for depreciation?

Used fixed asset should be measured, the basis for calculating depreciation is the initial value. The valuation of fixed assets is carried out in accordance with the balance sheet and tax law specifying the initial value of fixed assets based on:
  1. purchase price - for fixed assets purchased at home and abroad,
  2. manufacturing cost - for self-produced,
  3. market value - for a donation, unless the contract results in a price lower than market value.
As a result of the improvement of resources, the initial value can be changed. By purchasing the costs accrued until the date of transferring the fixed asset to use, the taxpayer may increase it.
For example, transport, loading and unloading, road insurance, assembly, installation and commissioning of computer programs and systems, notaries, taxes and other charges may increase the value of the initial value. The price also includes customs duty and excise duty in the case of imports.


When can I depreciate a fixed asset?

The month following the month in which the asset was registered in the fixed assets and intangible assets register is the date of commencement of depreciation, it ends when the value of depreciated write-offs equals the initial value of the asset.You can describe this by example:

In June 2018, the company adopted a passenger car worth PLN 30,000. The entrepreneur of the first depreciation amounted to PLN 500 in July 2018, for example calculated in such a way (30,000 x 20%) / 12 months. If the company does not sell this car before, it will make the last write off of depreciation in June 2023. Then the total value of depreciation for 5 years will reach 30 000 PLN.

When an asset is liquidated or its resources are lacking, there is an exceptional situation, then the last write-off should be made in the month of the occurrence of one of the events.


What are the types of fixed asset depreciation?

  1. LINEAR DEPRECIATION
    It is the simplest and most widely used method of depreciation of fixed assets. In this case, the taxpayer must assume that the consumption of the fixed asset will be uniform over the entire period of use. Write-offs are determined on a constant basis throughout the period of depreciation of the rate.

  2. DEPRESSIVE DEPRECIATION
    It is a method in which the amortization value changes due to the change in the profitability of a fixed asset with its useful life. Devices belonging to fixed asset groups 3-6 and 8 or machines are in this case fixed assets of the taxpayer. Applies to all modes of transport except for passenger cars.

  3. NATURAL METHOD OF DEPRECIATION
    It is the least used method. It refers to the natural and physical consumption of a given asset. The taxpayer declares that the consumption of the object is the same for each unit of work (eg kg, piece, hour, etc.). The amount of depreciation is then dependent on the amount of work done in a given period of time.

How are depreciation charges determined?

Annex 1 to the PIT and CIT Act contains all rates of depreciation charges, determined on the basis of classification of consumables (classification of fixed assets).

What is a Classification of Fixed Assets (CFA)?

To determine depreciation rates and statistical surveys, a systematic set of fixed assets (CFA) should be used. Bagrupp Each of the groups of fixed assets mentioned above undergoes the second level of division (into two-digit symbols). There is also a third level of division intended, for example, for lorries (KZT and 742).
On January 1st, 2018, the new CFA classification came into force, until the end of 2017 for purposes of personal income tax (depreciation), in the reports and for statistical purposes, the classification of KET 2010 has been used so far.
There have been many minor changes in the classification, for example a computer classified as KSD 491 so far will be classified as KSD 487.

The current depreciation rates can be found here. For example, cars have the symbol KKT 741, so for them the depreciation rate is 20% per year.


When amortization is not a cost?

  1. If the passenger car is more expensive than the current limit of:
    • PLN 150,000 (in case of non-electric passenger cars),
    • PLN 225,000 (in case of electric passenger cars).
    So when the taxpayer bought the passenger car for PLN 190,000, the cost will not be a surplus of 40,000 zł.
  2. If the purchase of a fixed asset was financed entirely from a grant.
  3. If the fixed asset was used for free use, the depreciation charge for these months is not applicable.

CAR IN THE COMPANY

Bagrupp 1. CAR AS A FIRM ASSET

The car can be entered in the register of fixed assets and it is a fixed asset. The car used for use should be priced, and its initial value is usually the purchase price.

The invoice for the purchased car must be filled in with the data of the given entrepreneur. The cost of the purchase should include the cost of the car and the cost of transport. In the case of import, customs duty and excise duty are also included.

In order for the car to become a company car, you must write a declaration of carriage only for business purposes. (Contents of the declaration below.)
“I declare that on .................... I have transferred the ............... passenger car for business purposes. Number of car registration.........., Vintage ..... Engine ..........., vehicle mileage .......... km. The starting value of the car is ......... zł, determined on the basis of VAT invoice / purchase agreement No. ............... dated .............”
signature
Statement with attachments: Should be transferred to accounting.


Auto as a last resort at the expense of the company

The depreciation charge is calculated on a monthly basis and deducted from income tax. The linear method is most often used in the case of car amortization. According to linear amortization, the amortized product is used evenly throughout its entire lifecycle. Each month following the month of placing the car in the register of fixed assets, the object loses its value. The basic annual rate of depreciation for new cars classified to KE 741 is 20%, i.e. car amortization lasts 5 years.

In the case of a used car (used by the previous owner at least 6 months), depreciation takes 2.5 years and amounts to 40% per year.
However, remember about the car's depreciation limit. It amounts to PLN 150,000 in case of non-electric passenger cars and PLN 225,000 in case of electric passenger cars.
So when the taxpayer bought a car for PLN 190,000, then the cost will not be a surplus of PLN 40,000. Depreciation of 20% per annum should be calculated from PLN 150,000.


VAT on cars on fixed assets

If the entrepreneur submits the VAT-26 to tax office and record that the car is used exclusively for business purposes, he can deduct the entire VAT tax. Otherwise, you can deduct only half of the input VAT when you buy a car.

Accounting causes many problems for taxpayers. Many decide to give up full VAT deduction because they are not able to complete the obligation to complete the documentation.


Car income tax on fixed assets

According to the amendment to the Personal Income Tax Act, from the first of January 2019, the vehicle records for private cars used by entrepreneurs in the company were liquidated. Taxpayers may include in tax deductible costs only 20% of the amount of expenses related to the operation of their own private vehicle in the company. 80% of the total of these expenses is not a tax cost.

In the case of a rented car - you can deduct 75% of the amount from the invoice for the car (for fuel, car washes, car parts, repair, insurance, etc.).


Sale of a company's car is the revenue of the company

In practice, this means that it is classified as "other income", which means that you must pay tax on it. The tax is paid on income, so we can deduct the costs. The unadjusted value of the car is in this case a cost. The taxpayer is obliged to pay 3/5 of the value of the car in the case of depreciation of 20% per annum sold after two years of use.
The cost of the deduction does not exist if the entity sells the car fully depreciated and used depreciation charges during depreciation. Then he pays the tax only on the actual sale price.
Sales of a company car must be subject to VAT. So, when selling a car, an entrepreneur issues an invoice with 23% VAT.


Car withdrawal from business for own needs

Within 6 years from the withdrawal of the car from the company if the taxpayers do not decide to sell it, it will not constitute an enterprise's income. In the case of sale of the withdrawn vehicle, it will be accounted as revenue from operations even if the company is already closed.

In the case of the sale of a car withdrawn for private use within 6 years, the taxpayer has at his disposal an unamortised initial value, which can be taxed at the time of sale.

The entrepreneur must also pay VAT.

If the entrepreneur has partially or fully deducted VAT, he is obliged to pay VAT at the time of its withdrawal.

If the entrepreneur has not deducted VAT from the purchase of the vehicle, he is not obliged to pay VAT on the detained car.


Donate company's car

Donation is not income on the part of the donor (eg entrepreneur) because it is a free service. The tax is then on the side of the beneficiary. However, this is not only a tax on inheritance and donations.
A tax-free gift may be a donation to a spouse, children, parents, stepchild, siblings, stepfather and stepmother if it is reported to the tax office within 6 months.
If the value of the received donation from one person in the last 5 years does not exceed PLN 9,637 or if the donation agreement takes the form of a notarial deed, the applications do not have to be submitted.


2. CAR USED IN A PRIVATE COMPANY OWNED BY AN ENTREPRENEUR

Taxpayers who use their own private car for company can only include 20% of the amount of expenses related to the operation of the vehicle in tax deductible costs. (for fuel, car washes, car parts, repair, insurance etc.).


3. CAR PURCHASED IN OPERATIONAL LEASING

It is not subject to depreciation because it is not owned by the lessee. Such a car is used by the entrepreneur on the basis of a rental agreement. Until the purchase of the car, the entrepreneur is obliged to pay the lease installments included in the VAT invoice.

When the car is also used for private purposes, you can deduct 50% VAT on each invoice. If the entrepreneur wants to deduct 100% VAT, he should submit an appropriate VAT-26 declaration at the tax office. If the company does not submit this form, then it may include only 75% of the amount from invoices for exploitation and leasing costs (up to income tax) and deduct 50% VAT.
However, one should be very meticulous in the case of record keeping because Polish state authorities have the right to check its credibility. If the entrepreneur does not document the course on a regular basis, the Tax Office has the right to refuse full deduction of VAT on leasing installments.

4. CAR PURCHASED UNDER FINANCE LEASE OR CREDIT

It is owned by the trader and can be depreciated. Interest is also deductible every month.

VAT is settled either in 50% of the car also used for private purposes and 100% of the car for business purposes, if it is running a taxi and is tax-deductible 26 to the tax office.

STOCKTAKING – INVENTORY AT THE END OF THE YEAR

Bagrupp The list drawn up by the taxpayer should contain: 14 days from the end of the census is the time when all items in the list should be priced.
The act of writing the inventory must be done once, however, the obligation passes through the inventory twice: on December 31 and on January 1. Because the census carried out on the last day of the tax year has the same value and is also valid on the first day of the following year.
The amount of costs incurred in the deductible tax year depends on the initial and final value of the inventory included in the balance sheet of the entity.

The entrepreneur must remember about the obligation to draw up a summary cache at the end of the year.

THE COST OF STAFF EMPLOYMENT

Employment contract

The balance sheet of the company includes the initial and final inventory value, the employee's salary is only 60% of the expenditure of the employer who wants to employ an employee on the basis of a contract of employment.

The employer must deduct off the employee’s gross monthly salary: An employee whose gross monthly salary is PLN 2 250 will receive their pay less: ---------
sum of contributions for health insurance
National insurance contribution 308,48. The total of contributions paid by the employee will amount to PLN 616,22.

Employee gets a salary in the amount PLN 1633,78.

In addition to the gross salary paid to the employee, the employer also covers other expenses. The estimated costs of employing a worker under a contract of employment amount to 20.74% of employee's gross salary. Bagrupp The employer must also cover the following costs (in addition to monthly payments of wages and salaries to employees and social security contributions): Costs of payroll administration are increasing In case of employing an additional person.


Fee-for-task agreement

Depending from the employee’s position the Total cost of employing a person is different:
Contract for specific work
In the case of such an agreement, the employer is not obliged to pay ZUS contributions, except for the two cases set out below. The salary of the worker is the only cost of the employer.
In cases where the employee is employed under a contract of employment and the employer who is a party to the contract also becomes a party to the work contract, or alternatively, if the recipient of the specific work (subject to the contract for specific work) is the employer then there is also an obligation to pay insurance .

SALARIES AND SICK LEAVE

Remuneration for sickness time is: In this case, a benefit of 80% of basic pay is paid.
The time of payment depends on the employee's age, most often the employer has to pay a total of 33 days of sick leave. Employees who have reached the age of 50, the employer pays benefits up to 14 days in the calendar year. After this period, the obligation to pay benefits goes to ZUS.
The sickness insurance fee is paid by the insured person due to: Bagrupp
Electronic medical leave

From 1st January 2016, doctors issue electronic medical exemptions (e-ZLA). Until the end of 2017, they were also available in paper version.

This is to facilitate the circulation of documents. The condition of using this facility is to have a PUE ZUS profile. Registration can be made here.

Select one of the options: Bagrupp The form of a medical certificate issued in the form of an electronic document is established by the Social Insurance Institution (ZUS)

Electronically making e-ZLA is very beneficial and takes much less time than making a paper version. The doctor has access to the data of the insured patient, his employers and family members (if this is an exemption to look after them). The date of incapacity for work is verified by the system in accordance with applicable regulations, letters A and D and the statistical number of the disease. It also shows the doctor the possibility of referring the patient to treatment as part of the disability pension prevention.

When an e-ZLA is issued by a physician, an employee does not have to take it for work alone. The employer gets it directly from the doctor electronically. The employer can also check the correctness of the release. Thanks to the PUE profile, it can also send Social Security Z-3 to ZUS.


No registration on profile at PUE ZUS
If the employer does not have an employer profile at PUE, it is not possible to send e-ZLA electronically. In this situation, the doctor is obliged to provide the patient with a printout of the dismissal, and the employee must provide it for work alone.
It is therefore worth to register on the PUE ZUS profile to benefit from electronic document flow facilities.

PIT11 - WILL SOON BE THE DEADLINE FOR SUBMISSION

To settle the labor tax, we need PIT 11. This document is filled with information about revenues from 2016 and collected tax advances.

PIT-11 must be prepared and sent to the tax office by the end of February of the year following the tax year (Article 39 paragraph 1 of the PIT Act). Employer can be punished with penalties if the deadline is not met.

The employer is obliged to issue a PIT-11 to an employee who has left the service (with notice, agreement of the parties or disciplinary) or has retired in a year, at the employee's request. The employer has 14 days from the date of submitting a written application by the taxpayer to the preparation and submission of PIT-11 to the tax office.

If the taxpayer fails to make an annual tax calculation (PIT-40), he may receive information about PIT-11. (Article 39 paragraph 1 of the PIT Act). Bagrupp Issuing a PIT-11 is not required if the employee was on maternity leave throughout the tax year and did not receive any benefits during this period.
The employer should remember that the deadline for issuing PIT-11 and submitting them to ZUS is February 28th.

SUSPENSION OF OPERATIONS IN POLAND

As you know, running your own business is associated with the risk of losing financial liquidity. There is a time when an entrepreneur may be in a period of low income.

Thanks to the Polish legislation, this is not immediately associated with the liquidation of the enterprise. There is a facility that in the case of low revenues due to the seasonality of business and the lack of profitable orders, and thus lack of funds to cover costs related to the activity. The employer may decide to temporarily suspend the company. The reason may also be a change of owner, illness of the owner, travel abroad or other accidental events.

Who can suspend the activity? Bagrupp What are the benefits of the suspension of operations in a hostile period? What are the disadvantages to suspend business? The suspension of a civil law partnership is possible only when the remaining shareholders also suspend it.
The maximum time for suspension for a company is 24 months, the minimum is 1 month.
The date indicated in the application (not earlier than the date of submitting the application) is the date of commencement of the suspension and continues until the activity is renewed.

Where and how to make the suspension of activity?
You must submit an application to the Central Registration and Information on Economic Activity (CEIDG). CEIDG Printing-1 is also the application for entry in the register, but that concerned the suspension, check the X in the box 01.3.
Detailed information here (Also available in English).

What the law prohibits the suspension of activities?
If the company is suspended its owner has no right to conduct this business and obtain income from this source. Fixed assets are also not amortized.
However, the entrepreneur has the right to perform the same services that he provided in the scope of his suspended business under a contract for the provision of services. What steps an entrepreneur can take place during the suspension of activity?
Thanks to the Act on the freedom of economic activity during the suspension of economic activity, an entrepreneur may: How to hang up activity?
If the entrepreneur does not submit an application for resumption of business activity within 24 months - he will be removed from the register of enterprises.
In order to resume operations, an application for withdrawal from the CEIDG-1 application should be submitted

Is it possible to extend the suspension of operations?
According to Polish law, an Entrepreneur is not able to extend the period of suspension of business operations.
However, it has the option of resuming the activity and then re-suspending it for the CEIDG-1 application described above.

SEARCHING OF COMPANIES

The Polish ministry provides an online search option for companies appearing in the national register (here).

If you looking for:
1a. PROPRIETARY COMPANIES - The Limited Liability Company (LLC), Joint-stock company / Public Limited Company (PLC).
1b. PRIVATE COMPANIES - for example Limited Partnership (LP) or Partnership limited by shares On the website it is possible to search companies online using the KRS number, other identification numbers or data on the company's location (LLC or PLC). To check whether our contractor is no one's debtor, the register of insolvent debtors is also made available.

2. CIVIL PARTNERSHIP OR SOLE PROPRIETORSHIP
You can find an entrepreneur in Information Central Register (CEIGD).
https://prod.ceidg.gov.pl/
The website is available in Polish and English.

3. Checking the status of the entity in VAT
https://ppuslugi.mf.gov.pl/_/

4. VIES VAT NUMBER VALIDATION
http://ec.europa.eu/
This page allows you to verify the validity of a VAT number issued by any Member State.
All you have to do is select the Member State from the list, and then enter the VAT number you want to check. (the site is available in several languages)

VIRTUAL ACCOUNTING

Nowadays, you do not even have to leave your flat to manage your company's accounts. The Internet can be used as a tool that makes work easier. Through the Internet, you can make transfers and manage finances, and above all communicate with others, do business and deal with the accounting of your company yourself. Many people even give up the services of professional accounting firms.

Can you profit from virtual accounting and how?
There are many virtual accounting offers on the market, however, you should be careful when choosing which one to entrust with managing your finances. Choose what's best! All you need is a computer and internet access. We are constantly developing better and more modern tools to facilitate business. No more leaving the office to discuss important issues to use virtual accounting. You do not even have to leave your home. Companies in large cities like Warsaw, Kraków, Wrocław and Poznań, as well as those from smaller towns more often choose virtual accounting. It is a quick and convenient way to settle the most important issues for running a business without spending a lot of time and leaving the apartment.

Now you can have access to all accounting services from assistance with assumption of activity, through financial consultancy to basic accounting duties. In addition, the invoicing program provides you with all the tools you need in one place.

Especially entrepreneurs running small businesses, often suffering from excessive duties and lack of time should be interested in this form of accounting.

Virtual accounting is often difficult for large companies because they often look for custom solutions. Virtual accounting will give you peace of mind, a lot of time and money saved. It will help you significantly improve your business. It's enough to take care of a small amount of documents and go to online accounting tomorrow.

You can also manage your finances from the screen of your phone. Many platforms related to virtual accounting have already adapted their websites to mobile versions. Thanks to this you can check what the situation in your company looks like at any time. Virtual accounting is perfect for you and can only bring you benefits. But are you sure? What if there are any errors in settlements? Professional, traditional accounting offices are insured from this type of cases. Who will answer for the mistakes of virtual accounting?

This matter is not entirely clear. Usually, the platform is responsible for errors, but you should be careful because in some cases, the responsibility is yours.

What is the ideal solution for entrepreneurs?
It’s virtual accounting combined with traditional but new rules. Remember that the best trust only the best! What do you say about this type of accountant? It sounds great to me! Think about time and money that you will save and you will be able to devote to developing your business!

3 REASONS WHY IT IS WORTH CHANGING THE ACCOUNTANT

Accounting and monitoring of the company's financial results are the most important issues when starting up your own business. That's why a good accountant is half the battle for you.

How can I choose which accountant is the best for my company?

It is known that choosing the right accountant should be guided by his competence and professionalism.
An experienced accountant can protect us from many mistakes because he/she will be sensitive to the nuances and less common aspects of tax law. A good accountant should use tax law in practice maximizing your benefits. The fact that your current accountant is trusted and performs his duties does not mean that he uses the maximum possibilities for your company. It's best to choose a person who can provide you with the most complex and beneficial tax protection without stopping only on everyday popular services.


Tax settlement got done – what’s next?
The ideal accountant will adapt to the business partner, approach each client individually and take into account the features of the market on which your company operates. Only a tax company with qualified staff and adequate facilities can provide such comprehensive services.
You work with this type of company as a partner with whom cooperation should bring mutual benefits.

However, care should be taken for entities that are limited to performing only basic accounting services. Which is contrary to the individual approach to the client and serving him with the highest quality services.


Trust and quality come first

Trust is the most important issue in the cooperation of an accountant with an entrepreneur. An entrepreneur should give his accountant full confidence, rely on him in the selection of the best options for his business and rely on his qualifications, while the accountant should repay the total honesty and service of the company's finances on the highest level. It must guarantee the highest quality of its services so that companies do not face unpleasant consequences in the event of errors. Therefore, choose a reputable, proven company that will provide you with an individual, flexible approach and will save you time lost in checking the constant changes in tax law. An accountant who wants to ensure your company's maximum development should take care of the order and transparency of accounting entries. Keep in mind that there is a significant difference between an accountant and a competent accountant. Filling in tax returns is just the tip of the iceberg, the second one can offer you.
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