Income tax and the moment of issuing the invoice


It must not be forgotten that the invoice, which is the accounting document that documents the sale of goods and services, is also important in terms of income tax. Check the impact of the issued invoice on income tax.

Income tax and tax obligation

By focusing on the constant legal changes surrounding VAT, you must not lose sight of the issues related to income tax - after all, every entrepreneur is obliged to settle it. As a rule, its amount is calculated by reducing the revenues achieved in a given period by the costs incurred at that time. Therefore, if when calculating the tax due, it is necessary to determine the amount of income, it is necessary to determine when the income arises during the implementation of such transactions. You have to be careful because there are situations when there are several such key dates.

When determining this deadline, it is necessary to take into account the fundamental provisions set out in the Personal Income Tax Act. Art. 14 sec. 1c says that the date of obtaining income is the date of delivery of the item, sale of property rights or performance (also in part) of the service. However, it is not that simple, as there are events that may constitute the date of the income - if they take place earlier than the day described in the act. These two events are: payment of receivables and issuing an invoice.

In addition, we can distinguish exceptions to the basic rule - there are several of them, although definitely less than in the case of the VAT obligation. This group includes services that are billed in the billing periods. Section 1e of the aforementioned Act indicates that in their case, the date on which the revenue arises is the last day of the settlement period specified in the contract or on the invoice - provided that such date may not occur less frequently than once a year. Paragraph 1h indicates that this principle also applies to the supply of electricity and heat, as well as line gas.

As for the second exception, it occurs when we receive the payment before the service is provided / goods are delivered / invoiced. Paragraph 1i says that the moment when the revenue arises is then the date of receipt of payment.

Revenue versus invoice - what is the relationship?

It follows from the provisions described above that the invoice is relevant for the occurrence of a tax obligation in PIT only when it is issued before the goods are released, the service is provided or the property right is sold.

What is the invoice issue date? Article 106i (1) of the Value Added Tax Act states that the rule here is to prepare it by the 15th day of the month following the month in which the goods were delivered or the service was performed. As a result, the invoice does not affect the revenue generation, as it can be issued up to 45 days after the transaction is completed. As for the specific rules on this point in time, we also refer to post-trade deadlines. Paragraphs 2-6 indicate exceptionally from 7 to 120 days.

The next paragraph of the Act - 7 - is worth more attention. It indicates that the taxpayer may issue an invoice prior to the provision of the service / delivery of the goods. The rule states that advance notice may be a maximum of 30 days. In this case, the income will be generated maximum 30 days earlier than in the standard situation.