Accounting services in Poland

Poland, an economic powerhouse in Central Europe, boasts a thriving business landscape, attracting both local entrepreneurs and international investors. However, to traverse the intricate and ever-evolving realm of Polish accounting standards and regulations requires expertise and guidance, precisely what a reputable legal firm offering specialised accounting services delivers.

Poland’s accounting framework is governed by stringent regulations aligned with European Union directives. The Polish Accounting Act stands as the cornerstone, setting the standards and guidelines for financial reporting and disclosure. Compliance with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) is mandatory, emphasising the need for meticulous accounting practices. For businesses venturing into Poland, comprehending and adhering to these regulations can be challenging. This is where a distinguished legal firm providing accounting services becomes a critical ally.

Calculation of wages in Poland

In order to avoid problems with Polish legislation, to ensure good relations  between employer and subordinate, as well as to organize the correct payroll and  timely payment of taxes, Each Polish company requires accounting services.  Accountants of our company calculate and pay wages, taking into account all  mandatory payments and tax rates:

• Mandatory pension fund payment – 9.76%
• Workers’ health insurance – 7.7 per cent
• Workers’ accident insurance – 1.5 per cent
• Income tax – 6.63 per cent
• Supplementary health insurance – 2.45 per cent

Internal audit of companies in Poland

One of the most important and sought-after accounting support services in Poland  is the company’s internal audit service. This service implies an independent  financial audit by a specialist of all accounting and tax reports of the Polish  company. The procedure must be followed in the following cases:

• To confirm the current financial condition of the company with the purpose of concluding contracts with foreign partners
• To increase the level of productivity and, consequently, increase the level of income of the company
• To reduce tax risks and burden
• To eliminate errors in tax reports that could lead to administrative liability
• To prepare for the reporting period
• To assess the competence and integrity of a staff accountant

All operations carried out within the framework of the internal audit of the Polish  company turn out to the clients of our company at a high professional level.

What is accounting?

Simply put, accounting means an accounting system,  i.e., accounting for business transactions (numerical and monetary), documented in the enterprise.

Accounting can be done in two ways:

• Full accounting (business books)
• Simplified accounting (books of arrival and expenditure, one time on arrival and expenditure, tax card)

The choice of a suitable solution is adapted to the needs of the company and the type of business.

Bookkeeping

Accounting consists of the recording of business events, such as the maintenance of books of accounts, valuation of assets and liabilities, storage of accounting documents, as well as such activities as the compilation of balance sheets.

Accounting records information on:

• Taxes
• Retention amounts of employees
• Sales transactions in the company
• Marketing and advertising

that is, all events that really affect the budget of the company.

Accounting in the company is carried out by people with the relevant knowledge, who work as accountants. This may be a staff member or an external accountant. Their duties include:

• Accounting
• Filing of tax and ZUS declarations
• Verification of accounting documents
• Balance sheet and negotiable statements
• Valuation of assets and liabilities
• Documentation preparation

Accounting in Poland – basic concepts

Accounting, on the other hand, is a much broader concept. It is defined as a system for processing information on all economic events occurring in a given enterprise.

Due to accounting, you can learn about the financial situation of the company and learn as much as possible about the consequences of doing business from various points of view, including:

• Financial (important for the business owner, potential investors or lenders)
• Tax (obtaining information about a person’s tax obligations, which is important for tax authorities)
• Management perspective (shows how efficiently the company is managed and what its potential development paths are, used by management personnel)

Accounting should be conducted in accordance with strictly defined principles, including the principles of continuity,  materiality, proportionality, prudence, accrual principle and prohibition of netting.

Main stages of accounting in Poland

Accounting is divided into three main stages:

• Accounting – i.e. records of business events, information on changes in the company’s assets
• Financial statements – balance sheet, profit and loss statement, cash flow, changes in capital, etc.
• Cost accounting – analysis and forecasting of business costs

In this way, accounting allows a much broader view and more accurate information about the company’s assets and potential development.

Company financial data

Accounting (maintained by a separate department in the company or accounting office)  performs several functions. First of all, it is providing the entrepreneur with full information not only about economic events, but also other issues that affect the financial situation of the company (in monetary and digital terms). This gives a broader picture of the state of business and facilitates strategic decisions for the future.

Accurate accounting allows you to keep the documentation in order and allows you to constantly check the situation in the company, which increases the speed of action in case of problematic events that may threaten the stability of the enterprise.

After all, correct and reliable accounting in the company is also reliable evidence for use in tax proceedings.

How to archive documents in a Polish company

The number of documents that appear in the company every day can be enormous. So please take care of how to introduce into your business clear archiving rules to ensure that the documentation is in order.

This makes it easier to find the necessary letters, as well as to fulfill the obligations imposed on the entrepreneur in connection with the need to archive accounting documents.

The main issues for entrepreneurs related to the archiving of documents:

1. Which documents should be archived?
2. What are the required retention periods for corporate documents?
3. Where should the archive be located?
4. What form can a company archive take?

Archiving of documents – an obligation under the law

Accounting obligations in business activities are not only regular calculations and sending of reports to the appropriate offices.

The Accounting Act also contains a number of additional obligations for entrepreneurs, including the obligation to collect and keep company documents. It should be carried out in the right place, using appropriate tools and based on well-defined rules. Otherwise, you may face serious financial sanctions.

Accounting Act – company documents to be kept

The Accounting Act specifies which documents must be kept in the company’s archives. These include, first of all, all files related to accounting and personnel issues, and most of all:

• Accounting books (including journals, main books and ancillary books, inventory, balance sheets and turnover reports)
• Financial statements and decisions to approve these reports
• Unified JPK files
• External and internal primary documents (including purchase and sale invoices, bank statements, payroll or cash records)
• Tax returns and official receipts

All documents should be collected and archived in accordance with the basic principles of maintaining complete order and easy recognition of the relevant files.

They should be grouped together in a thematic homogeneity and chronological order within a particular category. Each archived document should be permanently tagged with

specifying the name of the file type (for example, the ledger),  financial year and serial number in a given set.

Archiving of accounting documents – mandatory terms

The company’s document storage process is divided into two stages:

• Current, during the financial year, until the closure of the books of accounts and the approval of the financial statements.
• Permanent – Archiving of documents after the end of the financial year.

The above-mentioned Accounting Act sets minimum retention periods for company documents in the archives. It should be borne in mind, however, that this period may be extended by other legal acts.

Since 01.01.2019 in Poland, the storage terms for the following company documents have changed:

• Financial Statements
• Books of accounts
• Unified JPK files
• Tax documents
• Primary documents
• Salary cards of employees

shall be kept for a minimum of five years, counting from the beginning of the year following the end of the financial year.

The slightly more complex rules apply to the custody of personnel records. In the case of employees hired after 01.01.2019,  documents must be kept in archives for at least 10 years from the end of the calendar year in which the employment relationship ended. For persons who have been employed after 31 December 1998, but before 1 January 2019, this period may also be 10 years if the contributor has submitted an Information Report (IEA) and a Declaration (LSA) to the CPA. The files of staff hired before 1998 should be kept in the archives for 50 years from the date of separation.

Archive space – where to store accounting documents?

The archive of the company’s documents must be on the company’s premises,  as specified in the Accounting Act. However, there are exceptions to this rule.

The entrepreneur may delegate the maintenance of the archive a specialized external unit. This can be the accounting, accounting company or archive. However, it should be borne in mind that this option is permitted only if the entrepreneur has notified the relevant head of the tax inspectorate within 15 days of the transfer.

Company documentation archive – acceptable forms of storage

Archiving of company documents can be done in one of two systems or in a form combining both solutions. It is allowed to store the documentation in the following variant:

• Traditional
• Electronic

Correct archiving of company documents

The introduction of appropriate rules for the collection and archiving of documents in the company is necessary to fulfill the obligations imposed on entrepreneurs by the Law on Accounting and to protect against the consequences in case of tax inspection.

On the other hand, structured archives facilitate access to the necessary information to authorized persons, as well as improve the security of stored data. So you should take care of the order in the documents for the benefit of your company in the broad sense.

Changes in accounting management for the Polish company

Numerous changes in accounting for Polish companies are connected with the introduction of many new regulations,  effective from January 1, 2021.

Changes in the regulation of limited partnerships

One of the most important changes that will affect the work of accountants is the change in the method of taxation of limited partnerships. For the partners themselves, this means double taxation  – at the level of the company and partners.

Consequently, taxpayers will pay more and accountants will have to deal with a large number of documents for accurate and correct calculation for each legal entity.

Correction of invoices – amendment to the VAT Act

The question of changes in the case of corrective invoices is particularly questionable. An amendment to the VAT Act, the so-called Slim VAT package, removed the burden on taxpayers, which was the need to obtain confirmation of receipt of corrective accounts.

However, because of this type of invoice, a new obligation to collect other documents was introduced. Its purpose is to collect evidence that confirms the right to reduce the tax base. The full catalog of documents that meet these criteria has not yet been provided. These may, for example, be e-mails,  proof of payment or minutes of complaints. As a result, accountants will have a lot of additional information to analyze and include in the documentation of an established company.

JPK_ VAT files – extension of the amount of information in the declaration

From October 1, 2020, changes in the VAT reporting obligations also came into force. The existing files (VAT declaration and JPK_VAT file) have been replaced with a new JPK file, supplemented with additional information.

There are two versions of the file – for taxpayers who pay monthly (JPK_V7M) and quarterly (JPK_V7K). It consists of a declaration and a registration part in which completely new data were found,  previously unused data.

It is now necessary to indicate the codes of goods and services, evidence of sale or other types of transactions.

For example, the GTU codes, i.e. 13 groups of goods and services, are new. Their application is still not clear. The inaccurate description of the goods in the consignment note may raise doubts as to whether the goods should be labelled with the GTU code or not. This forces accounting to tighten the flow of information with the company in order to accurately identify the types of services and goods included in the invoices.

New regulations – changes in accounting

There’s still a lot of rule changes. In most cases, it means that there is a need for continuous learning and continuous monitoring and clarification of changes in order to be aware of and able to reliably carry out the responsibilities assigned.

Especially in the case of correction of invoices and changes in the JPK file, the new rules may have an additional effect. In addition to the increased workload, further reporting obligations and the extension of the SAF-T declaration require clarification of the cooperation between the company and the accounting profession in order to accurately determine each item included in the invoice.

Therefore, the analysis of invoices and their assignment of appropriate HGB codes becomes the responsibility not only of the accountancy, but also of the sales department and the warehouse, which should cooperate in the process of preparing the declarations for the tax inspection.

Foremost, Regulated United Europe ensures their clients’ compliance with Polish accounting regulations. They meticulously handle financial statements, ensuring accuracy and adherence to Polish GAAP or IFRS. Moreover, their expertise extends to tax compliance, guiding businesses through complex tax structures while ensuring adherence to Polish tax laws.

Beyond compliance, Regulated United Europe provides strategic financial advice that transcends basic number-crunching. We offer insights into optimising financial operations, identifying avenues for cost-saving, and advising on tax-efficient strategies to fuel growth within the Polish market.

Navigating the Polish business landscape necessitates rigorous risk assessment and due diligence. Regulated United Europe conducts comprehensive audits, ensuring meticulous risk management and compliance with regulatory requirements, safeguarding their clients’ interests.

In the intricate realm of Polish accounting and finance, partnering with a leading legal firm specialising in accounting services is an astute decision for businesses aiming to establish a robust presence in Poland. Armed with expertise, precision, and an unwavering commitment to compliance, these entities serve as invaluable allies in navigating complexities and seizing opportunities within the Polish financial domain. Regulated United Europe accountants would be happy to advise you further.