What is a Tax Revenue and Expense Ledger - PKPiR?

PKPiR is a Tax Revenue and Expense Ledger - an accounting tool used to keep current records of company documents on expenses and income. Based on it, the main tax bases are determined. See how to properly maintain PKPiR.

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What is PKPiR?

Tax Revenue and Expense Ledger - PKPiR - is a clear and highly simplified record used to record business income and expenses. Thanks to it, it is possible to calculate the advance payment of income tax. 

In the PKPiR, the entrepreneur records the costs incurred and revenues received, along with the exact date, description, amount. There is also space for comments or remarks. Each such entry is given a sequential number. The records kept in this way also include the totals of all income and expenses for the period. 

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Who is bound by PKPiR?

According to the Personal Income Tax Act of July 26, 1991, you can keep a Tax Revenue and Expense Ledger, or so-called simplified accounting, when:

→ you are a sole proprietor or operate as a civil partnership, partnership, general partnership or inherited enterprise,

→ the level of business revenues for the past year - did not exceed 2 million euros,

→ you settle your tax based on one of these forms: on a general basis according to the tax scale (rates of 12 percent and 32 percent) or on a straight-line basis (rate of 19 percent).

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Entrepreneurs with revenue equal to or greater than €2 million are required to keep so-called full accounting.

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When to set up a PKPiR?

The taxpayer is required to set up the P&C on the following dates:

→ if continuing operations - January 1 of the fiscal year,

→ if it starts operations - on the day of its commencement.

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Remember: if you outsource the maintenance of your PKPiR to an accounting office - you have 7 days from the conclusion of the agreement with the office to notify the head of the tax office (indicating the name and address of the office and the address where the ledger and documents are kept).

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How do you keep PKPiR?

Above all, reliably and in a flawless manner. That's the most important thing. You can decide whether you will keep the register on paper or electronically. The first option means an additional obligation to take care of binding (e.g., bind) the sheets and numbering all the pages. 

The PKPiR template can be found in Appendix 1 to the Decree of the Minister of Finance dated December 23, 2019 on keeping a tax income and expense ledger.

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When keeping an electronic ledger, you need to take care of a few things: 

→ select such a computer program that will allow a quick view of the recorded content, enable it to be printed chronologically and according to the pattern,

→ write down the user manual for the P&L software,

→ secure the collected data by protecting it from destruction or distortion. 

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You are not obliged to print PKPiR, but you should take care to save the accounting documents on your computer's hard drive, such as in PDF format, keeping them in chronological order. 

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What do we enter in the Income and Expense Tax Book?

PKPiR is the simplest form of keeping current accounting records. It includes costs in accordance with the terms of Article 22(1) of the Law on Personal Income Tax. Thus, the following items will be found here:

→ revenues,

→ purchase of goods or services,

→ expenses incurred in connection with the operation of the business (e.g., postage or bank charges),

→ research and development costs.

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Remember: in order for an expense to be tax deductible, it must be related to your business. As an entrepreneur, you must prove this connection. 

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Each of the recorded documents should contain the following data:

→ the name of the issuing entity,

→ date,

→ the subject of the business operation along with the value,

→ signatures of persons authorized to enter into business transactions,

→ sequence number or other designation that identifies the document.

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