Starting your own business? Check what type of accounting to choose.
Dreaming of your own company? Great! But before you dive into entrepreneurship, it's worth answering one key question: how will you settle your income?
In Poland, you have three main forms of bookkeeping to choose from. Each has its pros and cons, and the choice depends primarily on the type of your activity and expected revenues.
1. Lump-sum tax on recorded revenues – simple and uncomplicated
For whom? For individuals and partnerships of individuals who want to minimize formalities.
How does it work? You only keep records of revenues – that's it. You don't need to document costs because you pay tax on revenue at a fixed rate (depending on the type of activity – e.g., 8.5% for services, 15% for some professions).
Biggest plus: Even if your company grows and you earn millions, you don't have to switch to a more complicated form of accounting. Formalities remain minimal.
2. Revenue and Expense Ledger (KPiR) – the golden mean
For whom? For individuals and partnerships with revenues up to EUR 2.5 million per year.
How does it work? You record both revenues and costs. This way, you pay tax on actual profit.
3. Full accounting (books of accounts)
For whom? Mandatory for companies, limited partnerships, and entities exceeding EUR 2.5 million in revenues.
How does it work? Complete documentation of all business operations according to the Accounting Act.
Legal basis: Accounting Act, PIT Act, Lump-sum Tax Act