Revenue and expenditure account

Revenue and expense ledger is the most popular form of accounting. It is characterized by a simplified form of recording, hence the name simplified accounting. When starting a business, you can voluntarily choose a different way of accounting for documents. One of them are commercial books, or full accounting.

  • Most often simplified accounting is chosen by entities such as:
  • General Partnerships
  • Sole traders
  • Civil Partnerships
  • Partnerships

Turnover limit of the P&L register

When a given entity reaches the limit of EUR 2 million, it is obliged by law to switch from KPiR to full accounting.

Choice of the form of taxation

When starting a business based on the revenue and expense ledger, one has to choose the form of taxation. There are two tax forms to choose from. Tax scale (17% and 32%) and flat tax (19%). The threshold for the 17% tax scale is PLN 85 528. Everything above that amount will be subject to 32% tax.

For example, if you set up your business in May and you receive your first income on 20 August, you can change your taxation until 20 September. You can do this once a year.

List of accounting services of KPiR
  • Recording of documents for VAT settlements,
  • Preparation of statistical reports for the Central Statistical Office,
  • Preparation and on-going support for JPK V7 declarations and VAT-EU recapitulative declarations,
  • Representing clients before Tax Offices and Social Insurance Institution (ZUS),
  • Preparation of annual personal income tax returns,
  • Determining the amount of advances for personal income tax,
  • Ongoing tax optimization and management in consultation with the client
Revenue and expense ledger - advantages
  • A wider range of possibilities for claiming an expense as a tax deductible cost. This means that you don't have to think as much about whether an expense is deductible.
  • In the case of KPiR, tax is paid not on our income but on actual income. In simple terms, this means that if you bought something for 1000 PLN and the cost was 300 PLN, you will pay tax on 700 PLN.
  • In contrast to the accounting in the form of registered lump sum, KPiR allows you to take into account the costs. Lump sum settlement does not have such a possibility.
  • With a revenue and expense ledger you have much more influence on tax optimization. You can recognize certain things late - legally.
Disadvantages of a revenue and expense ledger
  • The biggest disadvantage of a revenue and expense ledger is the collection and storage of all the documents. Having to meticulously describe and check the accuracy of your accounting documents is very time consuming and tedious.
  • In KPiR we must document all expenses very precisely with receipts. Any irregularity will result in inability to count certain expenses as tax deductible costs.
    It may also happen that we will have to pay tax for the bill in a situation where the customer did not pay us.
  • Revenue and expense ledger is not everything. Taxpayers on KPiR are also obliged to keep records of fixed assets, records of intangible assets, employee income cards, equipment records or an audit book.

All that bureaucratic paperwork to keep very detailed records can effectively discourage business. Instead of focusing on being an entrepreneur, it can feel like you're focusing on being a full-time clerk in your own business.

Important tax deadlines

taxpayers on tax card settle accounts by the7th day of each month;

by the 20th day of each month, a flat-rate tax on registered income is paid;

until the 20th day of each month advance payments are made for income tax on persons conducting business on general terms;

advance payments for corporate income tax are made by the20th of each month;

till 25th day of each month settle VAT tax and submit JPK_V7M form. *does not apply to taxpayers settling quarterly.

until the 25th day of the month following the month in which the obligation to submit the summary VAT-EU information arose (electronic version), VAT EU shall be settled for the previous month. 

Important accounting terms - ZUS contributions

by the 10th of each month for employers who do not employ workers;

contributions for employees and for the employer of employees are paid by the15th of each month.