Tax returns: what should you know about them as an entrepreneur?

If you are an entrepreneur, one of your primary responsibilities is to file a tax return and settle your accounts with the IRS. How to do it properly and what should you keep in mind to avoid misunderstandings and penalties?

If you are a business, you are required to account for income tax (PIT), and if you are a VAT taxpayer - analogously VAT. According to the statutory definition, a tax return is a declaration filed for the purpose of tax settlements, but also returns, statements, lists, reports and information that taxpayers, payers and collectors are required to file under the tax law.

Declarations related to income tax

The main tax you have to pay as an entrepreneur is the income tax charged on your income (or income if you are a flat-rate taxpayer). This is the only form of tax with which you do not have to file a return with the tax office. After a given accounting period (month or quarter), you only make an advance payment to your individual micro-tax account, according to the settlement in your accounting documents. You calculate advance payments depending on the type of settlement declared in the CEIDG-1 application - monthly or quarterly. They can be:

- flat tax

- tax scale

- tax card

- registered lump sum

The competent office for the above is the office with jurisdiction over your place of residence.

Zero tax and annual settlement

If you are in a situation where the advance payment of income tax is 0 PLN, you do not have to pay tax or file any return. You also don't have to notify the tax office, because you show all advance tax payments calculated during the tax year in your annual return. You are obliged to do so, even if in a given year you show no income, have a loss, or your income did not exceed the so-called tax-free amount. On the other hand, if you record a tax overpayment in your annual return, you will receive a refund from the tax office within three months of filing your return.

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Types of forms you are required to submit to the US.

VAT related declarations

If you are among active VAT taxpayers, you are required to account for value added tax (VAT). As it is a turnover tax, you must calculate it separately. This involves monthly sending to the tax office a JPK_V7 file, i.e. information about purchases and sales in the form of an xml file, which are contained in the VAT register of purchases and sales. You should send the JPK_V7 file every month by the 25th of the month for the previous month, even if you account for VAT quarterly.

Unlike for income tax (PIT), you must submit a JPK_V7M file (for monthly VAT accounting) or a JPK_V7K file (for quarterly VAT accounting) for each period, even if you show zero tax. You also file JPK_V7 for periods in which there were no sales or purchases.

The competent office for the above is the office with jurisdiction over the taxpayer's place of residence.

Transactions in the European Union

If you have contractors abroad and perform so-called intra-Community transactions you are required to submit VAT-EU information. This is not a declaration, but information in which you summarize EU transactions, such as:

- Intra-Community supply of goods (ITA),

- Intra-Community acquisition of goods (ICT),

- sales of services to the EU.

VAT-EU does not cover importation of services. However, if you are a VAT-exempt taxpayer and you have imported services, you are required to file a VAT-9M return with the tax office. As the purchaser of the service, you are required to charge output VAT, as on sales, you must pay tax on the purchase of the service from the EU contractor.

Form of filing tax returns

You can file your returns by electronically or on paper, unless the regulations provide otherwise. Thus, if there is no special regulation, you may file your tax return using electronic communication or on paper. On the other hand, if there is such a regulation, you can file a given return either only on paper or only electronically. For example, you will file only electronically:

• PIT-4R - annual declaration on collected advance payments for income tax
• PIT-8AR - annual declaration of lump-sum income tax
• PIT-8C - information on paid stipend, income from other sources and some income from cash capitals
• PIT-11 - information about income and income tax withholding.

How can you sign an electronic declaration?

You can sign the electronic declaration in several ways:

• qualified signature
• with the user's electronic signature on the Tax Portal
• with an electronic signature verified by a customs certificate

- trusted signature or personal signature if the declarations are sent by:

• Tax Portal
• CEIDG
• Tax and Customs Electronic Services Platform.

• another electronic signature to ensure the authenticity of declarations and applications.

You can sign any type of return only with the signatures indicated for that return. Qualified signature is the only type of signature with which you can sign any tax return. The type of signature with which you will sign a given return is indicated by the Regulation of the Minister of Development and Finance of September 19, 2017 on the manner of sending declarations and applications and the types of electronic signatures with which they should be affixed.

If you want to know more about what types of signatures there are and how to obtain them, read our guide for entrepreneurs on what makes an electronic signature different from a qualified one.
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‍Datesfor advance payment of taxes