A Comprehensive Guide to Accounting for LLCs in Poland: Key Principles and Practices

📌 1. Legal Basis & Who Must Use Full Accounting

📘 Legal Framework

• Accounting for Polish companies is regulated by the Polish Accounting Act of 29 September 1994 and associated regulations. Companies must prepare records in Polish and in Polish zloty (PLN).
• For more information please visit Accounting for LLCs in Poland

📊 Company Requirement

• All LLCs (sp. z o.o.) are required by law to maintain full accounting (pełna księgowość) from the moment of incorporation — regardless of turnover or size.
• Unlike sole proprietors, who may use simplified methods, LLCs must adopt full accounting from day one.

📚 2. Full Accounting: What It Means

Full accounting in Poland is detailed and structured. It includes:

🧾 Core Elements

• Double-entry bookkeeping — every transaction is recorded both as debit and credit.
• Complete accounting books:
  • Journal (Dziennik)
  • General ledger (Księga główna)
  • Subsidiary ledgers (Ewidencje dodatkowe)
  • Turnovers and balances reports

📄 Documentation Rules

• Every entry must be supported by proper accounting evidence (invoices, contracts, bank documents, etc.) with dates, descriptions, and signatures.
• Documentation and books must be retained for a minimum statutory period (typically 5 years).

🧠 Accounting Policies

Each LLC must document its accounting policy (polityka rachunkowości), describing:

• Financial year definition
• Methods for valuing assets/liabilities
• The chart of accounts
• IT systems and data protection rules for electronic accounting

📆 3. Reporting & Annual Obligations

📊 Annual Financial Statements

At the end of each financial year (often the calendar year), the company must prepare:

1. Balance sheet
2. Profit and loss statement
3. Additional notes and explanations

These must be:

• Prepared within 3 months after the balance sheet date
• Approved by shareholders within 6 months
• Filed with the National Court Register (KRS) within 15 days of approval.

🧾 Audit Requirements

An independent audit is mandatory if the company meets two of the three thresholds in the preceding year:

• ≥ 50 employees
• Total assets ≥ €2,500,000 (in PLN equivalent)
• Net revenue ≥ €5,000,000 (in PLN equivalent)

🧾 Electronic Reporting

Companies above certain revenue thresholds (e.g., €50 million) must submit accounting data in JPK_CIT format to the tax administration.

💰 4. Taxation & Compliance

📈 Corporate Income Tax (CIT)

• Standard CIT rate is 19%, with potential reduction to 9% for small taxpayers or new companies.

🧾 VAT, Excise & Other Taxes

• LLCs must register for VAT if annual sales exceed 200,000 PLN or if engaging in certain taxable activities.
• Excise tax may apply depending on business activities (e.g., alcohol, fuel).

💼 VAT Reporting

• VAT returns must be filed monthly or quarterly depending on the company’s status and turnover.

🧑‍💼 5. Practical & Operational Aspects

💡 Accounting Software

• Since 1 January 2025, accounting books must be maintained using computer software

📊 Outsourcing Accounting

Many LLCs — especially foreign-owned ones — outsource bookkeeping to professional accounting firms to ensure accuracy, compliance, and efficient tax planning.

🏢 Language & Location Requirements

• All official records and the accounting system must be in Polish.
• If books are kept outside the registered office, you must notify the local tax office of their location.

🪪 Legal Responsibility

Company management (or the person entrusted with accounting) is responsible for filing accurate financial statements on time — and may face penalties for non‑compliance.

📊 6. Key Principles to Follow

✔️ Accuracy & Transparency

Ensure every transaction is recorded clearly and supported by valid documentation.

✔️ Compliance with Polish Standards

Translate and present books in Polish and keep them electronically in appropriate software systems.

✔️ Timely Reporting

Adhere strictly to deadlines for VAT, CIT, and annual financial statements.

✔️ Professional Accounting Support

Consider engaging experienced accountants or firms familiar with Polish law — especially if you are a foreign investor.

📌 Summary Checklist