Month: September 2024

 Did you fail to file your tax return on time? Or did you hide the true extent of your business activities from the tax authorities? Have you forgotten to pay your taxes on time? Unfortunately, for various reasons, such as forgetfulness, lack of knowledge or simple error, tax obligations are often not fulfilled on time or in accordance with the applicable regulations. In such situations, there is a fear that the taxpayer will be penalised. Fortunately, there is no need to worry – it is possible to avoid punishment through the institution of active regret, i.e. the voluntary reporting of the commission of a crime or tax offence.

 

What is active regret?

Pursuant to Article 16 of the Fiscal Penal Code, a perpetrator who, after committing an offence, notifies a law enforcement agency of the offence and discloses the relevant circumstances of the offence, in particular the persons who participated in the commission of the offence, shall not be liable to punishment for the fiscal offence or the fiscal infringement. It is therefore possible to avoid penalties, but certain conditions must be met.

 

How can the institution be used?

The entrepreneur will not be entitled to use the institution of active regret if:

• the law enforcement authority already has clearly documented knowledge of the commission of a fiscal offence;
• the law enforcement authority has initiated official acts, in particular searches, checks or controls aimed at revealing a fiscal offence or a fiscal misdemeanour, unless these actions have not provided grounds for initiating proceedings for that offence;
• directed the execution of the disclosed criminal act;
• took advantage of another person’s dependence on him and instructed him to carry out the disclosed criminal act;
• organised a group or association with the aim of committing a fiscal offence
• induced another person to commit a tax offence or a tax offence.

 

Thus, an active repentance will only be effective if the entrepreneur admits to having committed a tax offence or a tax crime before the law enforcement agency independently documents the offence or crime or before the law enforcement agency initiates actions aimed at detecting the offence or crime. Therefore, despite the fact that there is no legal deadline for filing an active repentance, it is recommended that the entrepreneur take action as soon as possible.

In order to make use of this facility, a written notification must be submitted to the competent tax authority. In this letter, it is necessary to describe in detail the error committed, the circumstances in which it occurred and the corrective measures to be taken, i.e. the payment of the outstanding tax liabilities, together with the interest due. It is worth remembering that an active complaint can be submitted not only in writing, but also orally in the minutes of the tax office. An active regret can also be submitted electronically, e.g. via e-Fiscal Office.

It is important that the active regret is submitted by the person who has not fulfilled the obligation. For example, if the entrepreneur uses the services of an accountancy firm and the fault lies with the accountancy firm, the active regret must be submitted by the accountancy firm.

 

Conclusion

Active regret is an institution that can help taxpayers and protect them from serious consequences. It is essential that the active regret meets all the formal requirements. Although filing an active regret does not exempt you from the obligation to pay overdue taxes and interest, it does allow you to avoid additional penalties. If you have any doubts, you can also contact us remotely: https://atl-law.pl/prawo-podatkowe/

I already know that from 1 January 2025 entrepreneurs will pay higher social insurance contributions. At the end of August this year, the government adopted assumptions for the draft state budget for 2025, in which the projected average salary is PLN 8673. This amount will be used as the basis for calculating ZUS contributions for those engaged in business activity. How much will entrepreneurs have to pay soon?

 

ZUS contributions in 2025 – basis of calculation

 The amount of contributions to be paid by an entrepreneur is calculated on the basis of 60% of the average salary. In 2025, the contribution base will be PLN 5203.80 (60% of PLN 8673). Contributions are calculated on this basis for

• Pension insurance;
• Disability insurance;
• Sickness insurance (voluntary);
• Accident insurance;
• Labour Fund.

In total, social security contributions will amount to approximately PLN 1,773.96, not including the health insurance contribution, which is calculated separately depending on the chosen form of taxation. This is almost 2,000 PLN more than the cost of an entrepreneur in 2024.

The increase in social security contributions in 2025 is only a consequence of the increase in the average wage. For many entrepreneurs, especially those running a sole proprietorship, higher contributions can have a significant impact on the cost of running a business.

 

Small ZUS Plus – relief for the smallest entrepreneurs

It is worth recalling that entrepreneurs who have been in business for at least 60 calendar days in the previous calendar year and whose income in the year preceding the submission of the application did not exceed PLN 120,000.00 can take advantage of the Small ZUS Plus programme and thus pay lower social insurance contributions.

 

Summary

The year 2025 will bring higher social security contributions for entrepreneurs as a result of an increase in the projected average wage to PLN 8673. For many sole traders, this means that they will have to prepare for a higher financial burden. It is important that entrepreneurs are aware of these changes and adjust their budgets for next year accordingly to avoid unpleasant surprises.

If you have any questions or concerns, we encourage you to contact our law firm. You can count on our full service and commitment at every stage of your case.

Every entrepreneur sooner or later asks himself what expenses he can count as deductible. This topic is quite controversial and inexperienced entrepreneurs often do not know how to deal with this problem and how not to make any mistakes. When an entrepreneur reaches for his or her wallet to pay for coffee and biscuits for employees or for a company event, the question naturally arises: can these expenses be charged as a business expense? The answer, as is often the case in tax law, is “it depends.” Keep in mind that not every purchase will always be treated by the tax authorities as a business-justified expense. So is it worth the risk and where does the line between cost and whim lie?

 

What are deductible costs?

Referring to the regulations, we may determine that, in accordance with Article 22 of the PIT Act, tax-deductible costs are expenses incurred in order to achieve revenue or to preserve or secure a source of revenue. The legislator is also tempted to indicate expenses which do not constitute tax deductible costs – this group includes, among others, the following:

• Purchase of land – the cost is not the purchase of land (only when selling land);
• The value of one’s own labour – the cost is not the work done by the owner or his family;
• Depreciation of an expensive car – the cost is not the depreciation of the value of the car over PLN150,000 (or PLN225,000 for an electric car);
• Donations – an expense is not donations made, except for food for charity;
• Fines and penalties – the cost is not the fines or penalties imposed.

Sounds simple in theory – after all, the legislature has made it clear what is a deductible expense and what is not – right? Well, somethimes it’s not that easy. Recognising an expense as a deductible expense requires proper justification and, in the case of groceries, the matter is not so obvious.

 

Purchase of groceries as a business expense – when is it possible?

The purchase of groceries can be recognised as a deductible expense, but only in certain situations. The key point here is how these products are used in the business.

If a business provides food products such as water, tea, coffee, etc. for its employees during working hours, this may be considered a deductible expense.  This is due, among other things, to health and safety regulations, which indicate that it is the employer’s duty to provide all employees with drinkable water or other beverages during working hours, and since this is an obligation, the expenses related to this should be tax deductible.

Unfortunately – expenditure on food products may be deemed to be representation, i.e. an expense that does not constitute a tax deductible cost. If the purchased products are aimed at improving the company’s image (e.g. a sumptuous treat at a meeting), then, as practice indicates, the tax office may question their inclusion as costs.

The indicated position has also been highlighted on several occasions by the Director of National Tax Information. For example, in a letter from this year he indicated that: “The recognition of a given expense as a tax deductible cost is possible only if it is evident beyond any doubt from properly and reliably documented events that it is a purposeful and reasonably justified expense…Among the expenses not recognised as tax deductible costs, the legislator has listed….representation costs, in particular those incurred for catering services, the purchase of food and beverages, including alcoholic beverages…The notion of representation does not include, however, those activities which are undertaken in relation to the employees’ own employees…the provision of foodstuffs reduces interruptions for the preparation of meals, which allows the employees to focus on the performance of their tasks. Eating together fosters integration, the exchange of ideas and the creation of new solutions. It improves relationships within the company. The provision of snacks makes employees feel valued and that they are an important part of the company. This strengthens their attachment to the company. The benefits aim to raise working standards and improve the atmosphere in the office. As a result, their productivity and efficiency increase. Employees are more motivated and work faster and better. Providing employees with groceries is now a common practice in the labour market, which encourages them to take up and continue working for an employer…The applicant is entitled to include as a deductible expense the expenses for the purchase of groceries indicated in the application (various snacks and non-alcoholic beverages, e.g. coffee, tea, juices, nuts, sticks, biscuits, milk, water, sugar), which are made available at the company’s premises to employees in the course of their tasks. These expenses do not constitute representation expenses”.

 

Grocery shopping and catering operations

The situation is different if you are in the business of catering, catering or trading in food products. In this case, the purchase of food products is directly related to your business and can be included as a tax-deductible expense without major problems. However, it is important to document exactly what products were purchased and how they were used.

 

Summary

The purchase of groceries can be included as a deductible expense, but only in certain situations and with proper justification. It is worth bearing in mind the relevant documentation and being prepared for possible questions from the tax authorities. As always, the devil is in the detail and each situation requires individual analysis.