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Cash flow is crucial for running a business. Many entrepreneurs struggle with paying income tax before receiving payments from their clients. This is where Kasowy PIT comes in – a solution that allows you to pay income tax only after receiving payment. Sounds good? Let’s check if this option suits you.
What is Kasowy PIT?
Kasowy PIT is a method of income tax settlement where the tax liability arises only when the payment is received. This means that an entrepreneur does not pay tax on issued but unpaid invoices. Similarly, deductible expenses can only be accounted for after they have been paid.
Who Can Use Kasowy PIT?
Not every entrepreneur can use this method. Kasowy PIT is available to:
- Individuals running a sole proprietorship,
- Taxpayers settling under the general tax scale, flat tax, IP BOX, or lump sum tax,
- Businesses with annual revenue not exceeding 1 million PLN in the previous year,
- Entrepreneurs who do not keep full accounting records and submit the appropriate declaration to the tax office.
Kasowy PIT is not available to civil law and general partnerships for income earned within these partnerships.
Is Kasowy PIT Worth It?
For companies struggling with delayed payments from clients, Kasowy PIT can be a great relief. It allows them to avoid paying tax on invoices that have not yet been paid, which improves financial liquidity.
However, Kasowy PIT also has its drawbacks. Deductible expenses can only be accounted for after actual payment, which may affect the amount of tax due in a given settlement period.
How to Opt for Kasowy PIT?
To take advantage of this method, you need to:
- Submit a declaration to the tax office – by February 20 of the tax year or within 20 days of starting a business.
- Keep records of invoices – including the invoice number, issue date, amount, and payment date.
- Settle tax on a cash basis – meaning only when the actual payment is received.
Summary
Kasowy PIT is a beneficial solution for businesses that want to avoid paying tax on unpaid invoices. However, before opting for this method, it is essential to analyze your finances and business model carefully.
Do you have any questions about Kasowy PIT? Contact our accounting office in Kielce and find out if this solution is right for you!
Source: https://www.biznes.gov.pl/pl/portal/005347
