No need to make an advance payment for income tax up to PLN 1,000!

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The Ministry of Finance, listening to the taxpayers' appeal, introduced from January 1, 2018, no obligation to make an advance payment for income tax to the tax office, if its amount is lower than PLN 1,000. The above change is directed primarily to small entrepreneurs, i.e. not earning significant income.

Obligation to make advance payments for income tax

In the light of Art. 44 sec. 1 of the Act of July 26, 1991 on personal income tax (Journal of Laws of 2018, item 200, as amended), hereinafter referred to as the PIT Act, taxpayers earning income:

1) from the economic activity referred to in Art. 14,

2) from rent or lease

- are required to pay advances on income tax during the tax year in accordance with the principles set out in paragraph 3, subject to the provisions of paragraph 2. 3f-3h.

Pursuant to the provisions of Art. 44 sec. 3 and paragraph 3f-3h of the PIT Act, entrepreneurs taxed according to the tax scale, as well as flat tax, are required to pay monthly tax advances during the tax year, and after meeting the relevant conditions.

Pursuant to Art. 44 sec. 6 of the PIT Act, monthly advances on the income specified in sec. 1 shall be paid by the 20th day of each month for the previous month. Quarterly advances are paid by taxpayers by the 20th day of each month following the quarter for which the advance is paid. The advance payment for the last month or the last quarter of the tax year shall be paid by the taxpayer by January 20 of the following tax year. He does not make an advance payment for the last month or quarter, respectively, if he submits a return and pays the tax on the terms specified in Art. 45. Taking into account the above provisions, by the end of 2017, each taxpayer of income tax had to pay it to the tax authority, regardless of the size of the advance.

Changes regarding the advance payment for income tax from January 1, 2018

From January 2018, the above situation will change significantly. The new regulations introduce the principle that the advance payment for income tax becomes obligatory only when it reaches the amount of PLN 1,000. Therefore, the payment to the tax office will not be obligatory in a situation where the tax due on the income earned from the beginning of the year, less the sum of the advance payments already made, does not exceed PLN 1,000. Pursuant to Art. 44 sec. 15 taxpayers referred to in paragraph 1. 1, paragraph 1, may not pay the advance calculated in accordance with the principles referred to in paragraph 1. 3 and paragraph 3f-3h, if the tax due on the income earned from the beginning of the year less the sum of advances paid from the beginning of the year does not exceed PLN 1000. If the tax due on the income earned from the beginning of the year, reduced by the sum of advances paid from the beginning of the year, exceeds PLN 1000, the difference between the tax due on the income earned from the beginning of the year and the sum of advances paid from the beginning of the year is subject to payment. In the light of Art. 44 sec. 16 provision of sec. 15 shall also apply to taxpayers who, at the same time as income from non-agricultural economic activity, obtain income from rent or lease or from special departments of agricultural production, the income of which is determined on the basis of the books kept.

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It should be emphasized that the above solution is voluntary. The taxpayer will have the right to take advantage of the deferred tax payment.

Example 1.

With the taxpayer, the advance payment for income tax for January 2018 was PLN 500. He used the option to defer its payment (the amount of the advance was lower than PLN 1,000). In February, the advance payment was PLN 650. Thus, the tax due from the beginning of the year amounted to PLN 1,150. Taking into account the provisions of the act and the sum of advances, which from the beginning of the year exceeded PLN 1000, the taxpayer is obliged to make an advance payment for February in the amount of PLN 1150 (no payment for January).

Example 2.

In January 2018, the taxpayer achieved an income of PLN 10,000. He pays a flat tax. The advance payment for PIT amounted to PLN 1,900. Thus, it exceeds the amount of PLN 1,000. The taxpayer has no choice but to pay a PIT advance payment of PLN 1,900 by February 20. In February 2018, the taxpayer achieved an income of only PLN 1,000 (the advance payment is PLN 190). The advance payment does not exceed the statutory limit of PLN 1,000, the taxpayer may pay the advance payment calculated in this way for February (until March 20) or not make the advance payment.