Not all companies are covered by the bookkeeping obligation in Poland. However, companies that in the last year generated a revenue exceeding a specific amount shall be required to keep accounting books from 1 January. In 2024, a new (lower) limit of revenue will apply for 2023 obligating companies to keep accounting books in 2024.
The year of 2024 has brought changes that will decide whether the taxpayer is able to utilize the status of a „small taxpayer”. Starting from 2024, the entities listed in Art. 24 sections 4, 4b, 4c and 4e and 4f of the Act on corporate tax (Polish Journal of Laws of 2022, item 2647 with amendments) that generated a revenue of at least PLN 9,218,200 in 2023 will be required to maintain complete bookkeeping. The bookkeeping obligation becomes effective at the beginning of the new financial year.
Who is covered by the said changes?
What is the reason for such a change?
The limit of revenue for accounting books in the amount of PLN 2,000,000 is translated into the Polish currency based on the average exchange rate published by the National Bank of Poland on the first working day in October in the year preceding a particular financial year.
On the second day of October, the National Bank of Poland announced that the average exchange rate for EUR as of the first working day of October 2023 was PLN 4.6091. It was a lower rate compared to the previous year, which was PLN 4.8272. Due to the lower EUR exchange rate, the amount of the limit for the obligation of complete accounting (that will become effective from 1 January 2024) is lower as well.
For comparison, the limit in 2023 was PLN 9,654,400.
The limit in 2024 is PLN 9,218,200.
The difference = PLN 436,200
How can one calculate their revenue to check whether they reached the limit and is now obligated to keep accounting books?
When determining whether the revenue threshold for the bookkeeping obligation was reached, entrepreneurs who kept records for tax purposes in 2023 should sum up the revenue referred to in Art. 14 of the Act on personal income tax, namely:
If the amount of generated revenue in 2023 is lower than PLN 9,218,200, then the entity in question may voluntarily decide on shifting from records for tax purposes to accounting books starting from the new financial year.
What to do when the revenue limit in EUR was exceeded?
Phase I. Closure of the revenue and expense ledger as of 31 December 2023
The ledger must be closed according to the provisions of the ordinance of the Minister of Finance on keeping the tax revenue and expense ledger. Closure of the ledger is mainly connected with the necessity to summarize the entries in the ledger, draw up a physical inventory and its evaluation, disclose the inventory values in the ledger and determine the revenue or incurred loss for the year.
Phase II. Preparing an inventory as of 31 December 2023.
The inventory and the valuation of assets and liabilities disclosed in the inventory must be carried out in accordance with the provisions of the Accounting Act. Items in the inventory drawn up by entities that had not kept accounting books before should be represented as the counterparts or expansion of individual items in the opening balance.
Stage III. Introduction of the opening balance to accounting books on 1 January 2024.
Individual values of assets and liabilities included in the prepared inventory are put in specific accounts. The transfer to accounts can be conducted directly from the inventory balances or by using the “AO – Accounting order” internal evidence.
Author: Patrycja Szczepańska – VAT specialist,the accounting outsourcing of MDDP Outsourcing in Katowice
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