In the act dated on October 29, 2021, signed by the Polish President on November 15, 2021, amending the act on personal income tax, the act on corporate income tax, and some other acts, the so-called “The Polish Deal” was made also an amendment to the regulations of the Entrepreneurs’ Law, which cover a new limit on cash transactions, applied from 2022.
The limit of cash payments in B2B transactions, compared to the current one, will be reduced from PLN 15,000 to PLN 8,000 or its equivalent in a foreign currency. This change also affects tax law. It means that from January 1, 2022, making or receiving payments related to the business activity performed must take place – as before – via the entrepreneur’s payment account in each case where the party to the transaction from which the payment results is another entrepreneur and the one-time value of the transaction, regardless of the number of payments resulting therefrom, exceeds – and is new – PLN 8,000 or the equivalent of this amount, and transactions in foreign currencies are converted into the Polish currency according to the average exchange rate of foreign currencies announced by the National Bank of Poland on the last business day preceding the transaction date.
In other words, entrepreneurs running a business will have to remember this rule. From the beginning of the new year, they will not be able to include the expenses in the part in which the transaction amount exceeding PLN 8,000 was not made via a bank account as tax-deductible costs. From January 2022, cash payments for transactions in the amount of up to PLN 8,000 will be a tax-deductible cost. When the taxpayer from 2022 includes an amount exceeding PLN 8,000 in tax-deductible cost and then makes a cash payment, then will be obliged to reduce costs, or increase revenues (if it is not possible to reduce costs) in the month in which for example a payment has been made accordingly without going through a payment account.
The introduced regulations more and more often force taxpayers to use non-cash transactions. For example, the introduction of an obligatory split payment mechanism for certain goods and services, in which the total amount receivable exceeds PLN 15,000 or its equivalent expressed in a foreign currency, is also one of the elements of increased control by the tax authorities over the business activity. In the background, we hear information about so-called “cashless” taxpayers and the benefits of using cashless transactions. All this, often under the guise of facilitation, ultimately hinders economic activity due to the fact that tax regulations are becoming more complex, require more and more attention and control by the taxpayers.
If you are interested in the topic, please contact our tax experts:
CEE VAT Compliance Director
VAT Compliance Manager