Tax and accounting limits for 2020 - simplifications
Tax limits for 2020
Tax limits for 2020 determine the status of a small taxpayer for the purposes of CIT / PIT and VAT.
|TAX LIMITS IN 2020||SMALL TAX PAYMENT STATUS FOR CIT / PIT OBJECTIVES IN 2020||SMALL TAX PAYMENT STATUS FOR VAT PURPOSES IN 2020
|VALUE OF SALE INCOME WITH VAT IN 2019 |
(course from October 1, 2019
in roundabout up to PLN 1.000)
|up to EUR 2.000.000 |
|up to EUR 1.200.000
(PLN 5.248.000) *
(exchange rate from October 1, 2019 in roundabouts to PLN 1.000)
|up to EUR 50.000 |
|*) The taxpayer running a brokerage enterprise, managing investment funds, being an agent, contractor or other person providing services of a similar nature (except for a commission) will obtain the status of a small taxpayer when amount of commission with VAT (or other form of gross remuneration) for services rendered in 2019. will not exceed EUR 45.000 (exchange rate from October 1, 2019, rounded up to PLN 1.000 -> 197.000 PLN).
Taxation of rental of residential real estate and re-invoicing for utilities
Taxation of real estate rentals
The rental of real estate is taxed at a rate of 23%.
Rental of real estate for housing purposes is exempt from VAT. The VAT exemption does not apply to accommodation services provided by hotels, motels and other hotel facilities (PKWiU 55), where taxation is 8% VAT.
Christmas gift - tax effects
Is the gift a tax deductible cost for the giver (provider)?
The purchase of a gift will constitute a tax cost, provided that the expenditure is incurred in order to generate income or to maintain or secure a source of income. In practice, this means that gifts should bear a company logo, of low value, and their delivery should be massively for advertising purposes (i.e. promoting the brand or products of the company). In addition, when input VAT on the purchase of gifts is not deductible, it is a tax deductible cost. In contrast, elegant and valuable gifts given to selected contractors and gift baskets in which we place branded sweets and alcohols are used to build or maintain good relationships and create a favorable image of the company, are representative and do not charge tax costs.
Mandatory split payment method
Split payment method
The split payment method (MPP) in a mandatory form for some transactions enters into force from November 1 2019.
MPP includes invoices for transactions that meet two conditions in total:
- the transaction concerns the purchase of goods and services listed in Annex 15 to the Act on VAT, which includes transactions of purchase of goods and services previously listed in Annex 14, 13 and 11 of the VAT Act, covered by the reverse charge mechanism and joint and several liability, including parts and accessories for motor vehicles, coal and coal products, electrical machinery and equipment, parts and accessories thereof,
- the total amount due from the invoice (i.e. the gross value of the entire invoice) exceeds PLN 15.000,00.
Amended tax regulations regarding depreciation rules
One-time depreciation - amended tax regulations
The Act of 7 July 2017 amending the Act on personal income tax and the Act on corporate income tax introduces the possibility of one-off depreciation on acquired, brand-new machines and equipment included in groups 3-6 and 8 of the Classification of Fixed Assets. Therefore, the investment relief does not include the purchase of real estate and means of transport. The initial value of the fixed asset should be at least PLN 10. The PLN 10 threshold can be met by purchasing at least two fixed assets, with the initial value of each individual investment exceeding PLN 3.500.
Reverse charge - construction services
The reverse charge mechanism consists in transferring the VAT settlement obligation from the supplier to the buyer. A reverse charge transaction exempts a taxable person supplying goods or service from the obligation to pay VAT. As a consequence, the seller issues a sales invoice without VAT, with the annotation "reverse charge" and prepares a VAT-27 declaration. On the other hand, the entity obliged to charge VAT is the buyer, who at the same time retains the right to deduct input VAT on the purchase.