Cash-based PIT for entrepreneurs
The government has adopted a draft law allowing the choice of cash accounting for revenue and deductible costs, the so-called cash PIT. The solution will be provided for small businesses and is expected to come into force at the beginning of 2025.
According to the Ministry of Finance, cash PIT will be available to entrepreneurs who carry out business activities on their own, if their revenues from these activities in the previous tax year did not exceed an amount equivalent to the equivalent of EUR 250,000. The solution will also apply to entrepreneurs who start their business activity.The cash PIT will be a voluntary form of settlement, which the taxpayer will choose by submitting a declaration to the head of the tax office.
This solution will result in entrepreneurs paying personal income tax only upon actual receipt of payment for goods issued or services performed and deducting tax-deductible costs upon payment for goods received or services performed.
After the lapse of 2 years, counting from the date of issuing the invoice, entrepreneurs will have to recognise business income even if they do not receive payment from contractors for the goods issued or services performed.