Documenting revenues and additional records
The next part of the cycle related to keeping a book of revenues and expenses will be devoted to two important aspects, such as: documenting revenues and keeping additional auxiliary records.
Documenting revenues in the KPiR
In accordance with the provisions of the regulation on maintaining the KPiR, revenues should be documented:
- fiscal receipt (posting cash reports),
- on the basis of sales records in the case of non-account sales,
- bank statement (payments received only via a bank account when the transfer is properly described),
- internal evidence,
- an accounting note.
If the entrepreneur has documented the income with a fiscal receipt and the buyer also requests an invoice, it should be remembered that the booking is made only on the basis of a cash report. In order not to duplicate entries in the KPiR, the invoice issued for the receipt should not be posted in the KPiR.
How to post revenues in KPiR?
The entrepreneur is obliged to record each sale made as part of the activity. Depending on whether he is an active VAT payer or not. Sales are mainly confirmed by invoices or reports from the cash register (daily or monthly). The sales value is entered in the KPiR in the net amount if the seller is an active VAT payer or in the gross value (net = gross) in the case of entities exempt from VAT.
Revenue from the sale of goods and services
Revenues from the sale of goods and services are posted to the KPiR on the date of obtaining the revenue, which is usually the same as on the date of issuing the invoice. Revenue on this account in the KPiR is recorded in column 7 - Sale of goods and services. The basis for making entries are the aforementioned invoices, a cash register report or a register of non-accountable sales. In the column in which revenues from the sale of goods and services are posted, the entrepreneur also includes the issued correcting invoices for sales invoices, as well as returns of goods indicated in the register of returns kept for cash registers.
Revenues in foreign currencies and exchange rate differences
Entrepreneurs are increasingly expanding the sales market to include foreign customers. Then it happens that the revenues are received in foreign currencies. However, in this case it should be remembered that entries in the KPiR are made only in the national currency. This means that the value of income in a foreign currency should be converted into PLN by the entrepreneur using the average NBP exchange rate on the day preceding the tax obligation.
In such a situation, the so-called exchange rate differences that result from comparing the currency exchange rate on the day preceding the invoice issue with the exchange rate applicable at the time of receipt of the payment.
We distinguish positive and negative exchange rate differences. Positive exchange rate differences take place, among others when the revenue actually received exceeds the one resulting from the issued sales invoice.
According to Art. 24 c of paragraph 1. 2 of the PIT Act, adding exchange rate differences arise when the value:
- due income expressed in a foreign currency after conversion into zlotys at the average exchange rate announced by the National Bank of Poland is lower than the value of this income on the day of its receipt, converted according to the actually used exchange rate on that day;
- incurred cost expressed in a foreign currency after conversion into zlotys at the average exchange rate announced by the National Bank of Poland is higher than the value of this cost on the payment date, converted according to the actually used exchange rate on that day.
On the other hand, Art. 24 c of paragraph 1. 3 of the PIT Act indicates that negative exchange rate differences arise when the value:
- due income expressed in a foreign currency after conversion into zlotys at the average exchange rate announced by the National Bank of Poland is higher than the value of this income on the day of its receipt, converted according to the actually used exchange rate on that day;
- incurred cost expressed in a foreign currency after conversion into zlotys according to the average exchange rate announced by the National Bank of Poland is lower than the value of this cost on the day of payment, converted according to the actually used exchange rate on that day.
The basis for posting exchange rate differences is usually an internal document to which evidence is attached, from which the exchange rate difference results and a printout of the average NBP exchange rates from the given days.
Examples of accounting vouchers - discussion of elements of an accounting voucher
The issue of VAT invoices is regulated primarily in the VAT Act. Pursuant to Art. 106e paragraph. 1 of the Act specifies the basic data provided for invoices. According to its content, the invoice should contain:
- date of issue;
- sequential number from one or more series that uniquely identifies the invoice;
- the first and last names or names of the taxpayer and the buyer of the goods or services and their addresses;
- the number by which the taxpayer is identified for tax purposes;
- the number by which the buyer of goods or services is identified for the purposes of tax or value added tax under which he received the goods or services;
- the date of the delivery or completion of the delivery of the goods or the performance of the service or the date of receipt of payment, if such a date is specified and differs from the invoice issue date;
- name (type) of goods or services;
- measure and quantity (number) of delivered goods or scope of services provided;
- the unit price of a good or service without the tax amount (net unit price);
- the amount of any price rebates or reductions, including in the form of an early payment rebate, provided that they are not included in the net unit price;
- value of the goods delivered or services performed, covered by the transaction, excluding the tax amount (net sales value);
- tax rate;
- the sum of the net sales value, broken down into sales subject to individual tax rates and sales exempt from tax;
- the amount of tax on the sum of the net sales value, broken down into amounts related to individual tax rates;
- the total amount due.
These are the basic elements of VAT invoices. The legislator provided for a number of specific situations in which the invoice should contain additional elements. These include, among others:
- invoices issued by small taxpayers using the cash method; then the invoice should contain the following annotation: "cash method";
- invoices for the delivery of goods or the provision of a service for which the buyer of goods or services is obliged to settle tax, value added tax or a tax of a similar nature; then the words "reverse charge" should appear on the invoice;
- invoices of entities exempt from VAT pursuant to art. 43 sec. 1, art. 113 paragraph. 1 and 9 or regulations issued on the basis of art. 82 sec. 3 - indication:
a) a provision of the act or an act issued on the basis of the act, on the basis of which the taxpayer applies the tax exemption,
(b) a provision of Directive 2006/112 / EC which exempts such supply of goods or services from tax, or
(c) any other legal basis showing that the supply of goods or services is exempt;
In the case of entities exempt from VAT due to the turnover limit, it is not necessary to include the legal basis for the exemption. You can read more about invoices of taxpayers exempt from VAT in the article: Invoice without VAT of a taxpayer benefiting from the exemption.
- invoices of entities using the VAT margin procedure; in the case of such deliveries, appropriate annotations should be made, for example "Margin Procedure - Second-hand Goods", "Margin Procedure - Works of Art" or "Margin Procedure - Collectors and Antiques".
- invoices for taxable tourism services on a margin basis; then the invoice should bear the annotation "margin procedure for travel agents".
Correcting invoice, also known as a correction, is issued when, after issuing the invoice:
a price reduction was granted in the form of a discount,
discounts and price reductions were granted,
goods and packaging were returned to the taxpayer,
the buyer has been reimbursed in whole or in part,
the price has been increased or there has been an error in the price, rate, tax amount or any other item in the invoices
If the corrective invoice reduces the tax base, the seller should have a confirmation of receipt of the correcting invoice by the buyer. Detailed information on this subject is presented in the article: Confirmation of receipt of the correcting invoice and reduction of the tax base.
The corrective invoice should contain:
- the words "CORRECTING INVOICE" or the word "CORRECTION";
- sequential number and date of issue;
- data included in the invoice to which the corrective invoice relates: invoice date, number, buyer and recipient data, including addresses and tax identification numbers;
- name (type) of goods or services subject to correction;
- the reason for the correction;
- if the correction affects a change in the tax base or the amount of tax due - the amount of the tax base correction or the amount of the correction of the tax due, respectively, broken down into amounts related to individual tax rates and tax-exempt sales;
- in cases other than those indicated in point 5, if the correction does not affect the tax base - the correct content of the corrected items;
- if the taxpayer grants a discount or reduction in the price in relation to all supplies of goods or services made or provided to one recipient in a given period, a correction invoice, which should additionally include an indication of the period to which the discount or reduction is granted.
A correction note is a document that, unlike a correction invoice, is issued by the buyer, not the seller. The credit note also differs from the credit note in terms of the scope of errors it corrects. As already mentioned, a corrective invoice can correct errors in both valuable items and, for example, in the buyer's data.
Pursuant to Art. 106k of the VAT Act, the corrective note should contain at least:
- the words "CORRECTING NOTE",
- sequential number and date of issue;
- the first and last names or names of the taxpayer and the buyer of the goods or services and their addresses and the number by which the taxpayer is identified for tax purposes, as well as the number by which the buyer of goods or services is identified for the purposes of tax or value added tax,
- data contained in the invoice to which the invoice relates (date of issue, invoice number, details of the buyer and seller along with NIPs)
- indication of the content of the corrected information and the correct content.
Neither the corrective invoice nor the note of all data concerning the seller or the buyer should be corrected. Corrections usually predict errors in the address, name or tax identification number, but not all elements at once.
An internal voucher is an accounting document that is used both as the basis for accounting for selected company costs and for certain revenues.
Internal proof characterizing the cost should refer to selected expenses described in § 14 section 2 of the Regulation on the KPiR, such as e.g.
- purchase of plant and animal products,
- purchase of auxiliary materials in retail trade units,
- settlement of a business trip,
- purchase of secondary raw materials,
- costs related to running a business in an apartment,
- court and notary fees,
- car parking expenses.
Importantly, internal evidence in revenues may be posted, inter alia, interest on bank deposits.
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Requirements for self-evidence documenting the sale or purchase
Depending on the type of accounting voucher that constitutes the basis for entries in the book, different requirements are imposed as to the content and its form. Some of them - invoices, correction invoices, correction notes are described in separate regulations - mainly the VAT Act, and the rest - other evidence, are specified in the regulation on maintaining the KPiR. In § 12 sec. 3 point 2 of the regulation it is specified that other evidence that may constitute the basis for entries in the book should contain at least:
- reliable identification of the issuer or indication of the parties (name and addresses) participating in the business operation to which the proof relates,
- the date of issue of the proof and the date or period of the economic operation to which the proof relates, provided that if the date of the economic transaction corresponds to the date of issue of the proof, it is sufficient to indicate a single date,
- the object of the economic operation and its value as well as its quantification, if the object of the operation is measurable in natural units,
- signatures of persons authorized to properly document business operations
- marked with a number or in another way that allows linking the proof with accounting entries made on its basis.
Records required to run the KPiR
VAT sales and purchase records
VAT registers are kept for the purposes of settling the tax on goods and services. Therefore, active VAT taxpayers who have registered for the purposes of value added tax by submitting the VAT-R form will be required to conduct it. In the registers kept, the entrepreneur includes the value of sale together with the value of the VAT due and the value of the purchase together with the value of input VAT. VAT registers are the basis for completing the declaration summarizing a given settlement period (month or quarter) - VAT-7 or VAT-7K declarations.
VAT registers also do not have a specific template, but in order to keep them properly, they should contain, among others:
- consecutive numbers of entries,
- invoice data (contractor, invoice number, issue date),
- the value of sales,
- value of the VAT tax, taking into account the division into individual rates.
Vehicle mileage records
Kilometers, because this is how the vehicle mileage register is commonly called, are required to be run by entrepreneurs who use a private or rented car in their business (not applicable to leasing). When running EPP, entrepreneurs may, on the basis of the calculations made, include as costs the expenses related to the operation of the vehicle for company purposes. Thanks to the kept records, it is possible to include a fixed amount spent, for example, on fuel, replacement of parts or oil of a private car not introduced to the company, but used for the purposes of the conducted activity, as tax deductible costs (of course up to a certain limit).
The Personal Income Tax Act (Article 23 (7)) also specifies the minimum scope of data that must be included in the vehicle mileage register. These are:
- surname, first name and address of the person using the vehicle,
- vehicle registration number and engine capacity (as this determines the applicable rate for 1 km),
- description of the route (from where - where to),
- next entry number,
- date and purpose of departure,
- the number of kilometers actually traveled,
- the rate for 1 km of mileage,
- the amount resulting from the multiplication of the number of kilometers actually traveled and the rate for 1 km of mileage,
- signature of the taxpayer (employer) and his data.
The calculation of the tax deductible cost, which is shown in the amount for a given month and in a cumulative year, is made on the basis of:
- the sum of the monthly mileage of the vehicle (the sum of the actual kilometers traveled shown in the vehicle mileage register multiplied by the rate of 1 km specified by the Minister of Infrastructure), which also sets the limit of qualifying expenses as costs;
- vehicle operating costs incurred during the month and their reporting in an incremental manner.
The current rates for 1 km of vehicle mileage are:
- for a car with a capacity of up to 900 cm3 - PLN 0.5214,
- for a car with a capacity of 900 cm3 - PLN 0.8358,
- for a motorcycle - PLN 0.2302,
- for a moped - PLN 0.1382.
These records are kept for items purchased for the purposes of the business, the value of which exceeds PLN 1,500 (net for active VAT payers, gross for exempt entities), and the expected period of use in the company is less than one year. The inventory of equipment should not be confused with the inventory of fixed assets and should not enter the same things both in the inventory of equipment and in the records of fixed assets.
If the entrepreneur introduced an item as an accessory, the value of which exceeds PLN 3,500, then if, one year after its introduction, it is still used in the company - the entry concerning it should be transferred to the fixed assets register, which is also associated with making a posting correction.
Records of fixed assets and intangible assets
In the register of fixed assets, the entrepreneur is obliged to enter fixed assets and intangible assets whose value exceeds PLN 3,500 (net for active VAT payers, gross for exempt entities) and the expected period of their use exceeds 1 year.
What does this obligation mean in practice? The register of fixed assets and the depreciation closely related to it, as a rule, prevent the inclusion of one-off costs related to the purchase of items of greater value. For fixed assets and intangible assets, a depreciation plan is created in which the initial value of a fixed asset is spread over time, showing the wear and tear of a given asset over the time it is used in the business. Fixed assets entered into the register are described with the symbol of KŚT - Classification of Fixed Assets. According to the symbol, a depreciation rate is specified for each of them.
The minimum scope of data that should be included in the register of fixed assets is specified in Art. 22n paragraph. 2 of the PIT Act. According to it, the list should include:
- ordinal number,
- date of purchase,
- date of acceptance for use,
- specification of the document confirming the acquisition,
- determination of a fixed asset or intangible and legal value,
- symbol of the Classification of Fixed Assets,
- initial value,
- depreciation rate,
- the amount of the depreciation write-off for a given tax year and cumulatively for the period of these write-offs, including when the asset was ever entered into the register (list), then removed from it and re-entered,
- updated initial value,
- the updated amount of depreciation,
- upgrade value that increases the starting value
- the date of liquidation and its reason or date of disposal.
The regulations do not prohibit introducing low-value items (below PLN 3,500) into the balance of fixed assets. Then the entrepreneur may apply a one-time depreciation.
Own additional records
Some companies, due to the specificity of their activities, may keep additional records, which will allow, above all, the taxpayers and tax offices to control economic events in the company.
Additional records at the KPiR, which are listed in the regulation on bookkeeping, are:
- foreign exchange records - for entrepreneurs dealing with currency exchange activities,
- records of loans and pledged items - kept by pawnshops.
In addition to these records, the entrepreneur may keep records for his own needs that will be helpful for him in the company. It may be a record of received subsidies and de minimis aid or an additional record of products (because in simplified accounting there is no obligation to use a warehouse and related documentation, but for its own purposes the entrepreneur may keep such a record).
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Consequences of missing or incorrect record keeping
Lack of records or their incorrect keeping has tax implications. Lack of records of fixed assets leads to no basis for posting depreciation write-offs, i.e. including them in the KPiR as tax deductible costs. This has negative consequences for the taxpayer who, taking into account incorrectly costs, acted to the detriment of the tax office.
Also, the lack of keeping records of the mileage of the vehicle, as a consequence, means that there are no grounds for including the expenses related to the use of a private car as tax deductible costs for business activities.
Therefore, you should pay attention to the applicable regulations on keeping records at the KPiR and follow the rules described, inter alia, in the Ordinance of the Minister of Finance on the operation of the KPiR, the Personal Income Tax Act or the VAT Act.