Preparation of annual financial statements in Poland

In Poland, the provision of an annual financial statement is a statutory obligation for all Polish companies – legal entities in Poland, regardless of organizational or legal forms, spheres of activity or business size, i.e. annual financial statements must be submitted by all entities included in the list of the National Court Register – KRS (Krajowy Rejest Sądowy). The volume of published information depends on the size and specifics of the enterprise. The filing of annual financial statements in Poland is regulated by the Commercial Code, the Law on Accounting and a number of relevant regulations. It is worth to mention that in general, accounting standards in Poland comply with International Financial Reporting Standards (IFRS).

Annual financial statements in Poland are submitted by:

• Limited Liability Companies
• Partnerships
• Limited Liability Partnerships
• Joint stock companies
• Partnerships
• Cooperatives
• European cooperatives registered in Poland
• Branches of foreign companies

Enterprises that are not subject to registration with the KRS submit reports under a simplified scheme to the tax authorities.

The annual financial statements of any company should reflect a complete picture of the company’s activities over the past year. This type of reporting is mandatory for all companies, whether it be:

• Enterprise that ended the past year with income
• Having expenses equal to income
• Those who have not carried out activities during the past year, and have no income

The reports on the activities of a Polish company must be prepared in the Polish language and in the currency of Poland.

If the company has made a profit, its sources and amount should be reflected in the balance sheet. If the costs of maintaining and developing the company are equal or close to the amount of income, then special attention should be paid to justifying the costs. In the absence of activity, declarations with zero income are submitted. In all cases, there are nuances that you need to know, or you can always use the services of professional accounting services.

You should also know that the financial annual report in Poland is not just drawn up and submitted to the Tax Office and KRS. It must first be approved by the competent authorities.

Annual Financial Statement and CIT-8

The financial statements of an enterprise in Poland consist of a balance sheet, a profit and loss statement and additional information. In addition, all businesses, except small ones, must draw up a cash flow statement. The board of directors or other governing body of the company must prepare an annual report on the business of the company and resolution of shareholders approving or non-approving financial statement.

The annual financial report is drawn up on the basis of specialized books – ledgers, where entries must be made consistently and continuously in the registers of accounting accounts. All registrations are conducted in a double entry system.

• Annual financial statements is submitted to KRS – up to June 30.
• CIT – 8 is submitted to the Tax Office – up to March 31.

What is included in the annual report:

• Annual financial report
• Management Board report
• Audit – if applicable
• Resolution of the general meeting of shareholders that approved the financial report and declaration of profit or covering loss

What is included in the annual financial report:

• Introduction to financial statements – basic information on a legal entity
• Enterprise balance
• Statement of income
• Additional information – the main items of the balance sheet, income statement and employment of the company

IMPORTANT! You need to know that financial statements that are not approved by the founders are not accepted by the tax authorities!

IMPORTANT! Since 2018, the submission of annual financial statements to the KRS is only possible in electronic form. Submission by power of attorney is not provided. Only board members can sign the reports with their electronic signatures.

Deadline for submission – The annual financial report is submitted to the registrar in the KRS Court by June 30 of the following year in electronic form through the S24 system.

These financial statements are necessary to obtain detailed information about the financial condition of the company and its creditworthiness, as well as the financial results of its activities. Depending on the size of the enterprise, the volume of financial statements can range from 2 to several hundred pages. The National Court Register is responsible for providing financial statements for most categories of commercial companies. The resulting financial statements of Polish enterprises can be used in the future to obtain information about customers in the implementation of export transactions, the purchase of goods or equity participation in the capital of Polish enterprises, as well as when deciding to apply to the courts in order to collect debts.

CIT – 8

In addition to the annual financial statement, taxpayers must file an annual CIT-8 return.

The annual income tax return is submitted after the end of the tax year. However, you need to know that during the tax year, the so-called “small taxpayers” (a reduced 9% rate applies to companies whose annual income has not exceeded EUR 2 000,000) can calculate and pay advance tax payments, which can be paid monthly or quarterly … After the end of the tax year, within three months, CIT taxpayers must submit an annual CIT-8 tax return for income or loss incurred in the reporting year.

The taxpayer pays the difference between the amount of tax due for the year shown on the CIT-8 declaration and the amount of advance payments paid during the tax year, if the amount of tax indicated on the report is higher than the amount of advance payments. If the amount is less, the tax office refunds the overpayment.

IMPORTANT! CIT-8 forms must be signed with a qualified electronic signature.

Deadline for submission – CIT-8 declaration is filed with the Internal Revenue Service by March 31 for the previous year. The declaration is submitted electronically

Annual financial reporting and audit

For companies such as joint stock companies, the annual report must be audited. According to the Law on “Accounting in Poland”, a company being audited must meet the following criteria:

• The amount of assets at the end of the year is more than EUR 2.5 million
• Net profit at the end of the year over 5 million EUR
• The number of employees of the company employed full-time more than 50 people

IMPORTANT! Any company can be audited in Poland, it does not have to meet the criteria. If you want to make sure that the company is working correctly, you can always order an audit of the financial statements of your company.

IMPORTANT! An audit in Poland can only be carried out by persons who have received an auditor’s accreditation. In addition, the auditor must also be employed by an accredited audit company. The result of the audit must be signed by the company conducting the audit.

You can get more information about audits and audits by reading the article on our website: https://progressholding.pl/ru/finansy-predpriyatiya-audit-2018/

These annual financial statements are provided by enterprises in Poland in strict accordance with Polish legislation and legal requirements for the protection of personal data.

It should be remembered that violation of obligations in the field of accounting and financial reporting of enterprises jeopardizes the criminal liability of members of the board and owners of the company.

In accordance with the Polish Accounting Act, employees responsible for the preparation and submission of financial statements may be punished with a fine if the deadlines for filing are violated or inaccurate data are provided. In other cases, imprisonment for up to 2 years.

Therefore, it is important to remember that it is necessary to comply with all the norms and terms established by Polish law when submitting annual financial statements.