Kasowy PIT' 2025: A Revolution in Calculations for Entrepreneurs

Cash PIT (Kasowy PIT) launched on January 1, 2025, as a genuinely revolutionary change for entrepreneurs: income tax is due only after you actually receive payment from your counterparty, not the moment you issue the invoice. A year and a half later, the method continues unchanged in 2026. Here’s everything you need to know before deciding whether to use it.

Contents

• What is Cash PIT?
• Who Can Benefit?
• Conditions for Applying Cash PIT
• Is Cash PIT Still in Force in 2026?
• Practical Accounting Aspects
• Corrective Invoices
• FAQ
• Checklist

What is Cash PIT?

The standard rule

Under the standard PIT rules, tax liability arises at the moment of sale: no later than the date of issuing the invoice, and no later than the date the debt is due, regardless of whether you’ve actually been paid.

The cash approach

Cash PIT introduces a different logic: tax is paid only after payment is received, expenses are deducted only after the bill is actually paid, and your tax obligations are synchronised with real cash flow rather than paper invoices.

Who Can Benefit?

Cash PIT is available to individuals running a sole proprietorship in Poland taxed under one of the following methods:

• General rules (zasady ogólne, 12%/32% scale)
• Flat tax (podatek liniowy, 19%)
• Lump-sum tax (ryczałt)
• IP BOX taxpayers

Conditions for Applying Cash PIT

To use cash PIT, you must meet all of the following conditions at the same time:

• income from business activity in the previous year did not exceed PLN 1 million;
• you keep simplified accounting records (not full bookkeeping);
• you have submitted a declaration choosing this method to the tax office by the February 20 deadline.

Exceptions: when the cash method doesn’t apply

Cash PIT does not apply when:

• transactions take place between affiliated entities (e.g., a company owned by your spouse);
• the counterparty is a business in which you hold more than a 5% share;
• your counterparty is based in an offshore jurisdiction;
• the transaction involves the sale of tangible or intangible fixed assets.

Is Cash PIT Still in Force in 2026?

Yes. As of mid-2026, cash PIT continues to operate exactly as it did when it launched on January 1, 2025. No legislative changes have been introduced to the mechanism, the PLN 1 million income threshold, or the February 20 election deadline. The Ministry of Finance has not published official statistics on adoption rates for the first year (2025), so it’s difficult to say precisely how popular the method has become, but there is no indication it will be withdrawn or amended for 2026 or 2027.

If you’re weighing whether to switch for 2026, the practical deadline to remember is the same February 20 declaration date. Miss it, and you’ll have to wait until the following year to opt in.

Practical Accounting Aspects

Accounting records

Keeping records under the cash method requires extra diligence. You need to document not just the invoice issue date but, crucially, the date payment was actually received. It’s essential to maintain a register tracking unpaid invoices for up to two years.

Deadlines

Two key deadlines apply regardless of when payment actually arrives:

1. 2 years from the invoice issue date: after this, income must be recognised even if unpaid; 2. the date the business is closed down: any outstanding unpaid invoices become income on that date.

Corrective Invoices

Downward corrections (reducing income)

• income reduction is recognised in the period when the refund is actually paid out;
• if no refund has occurred yet, it’s recognised in the period the correction was issued;
• you need documentation confirming the correction terms were agreed with the buyer.

Upward corrections (increasing income)

• the income increase is recognised when the additional payment is received;
• if unpaid, the same 2-year rule applies from the correction invoice date;
• the correction must be documented and agreed with the buyer.

FAQ

Can I switch methods mid-year? No. Once chosen, cash PIT applies for the entire tax year. You can only switch (in either direction) starting the following year, by submitting a declaration by February 20.

What about invoices issued before switching to cash PIT? They’re settled under the old (accrual) rules, even if payment arrives after you’ve switched to cash PIT.

How exactly is the PLN 1 million limit calculated? It’s based on income from the previous tax year. Exceeding it during the current year doesn’t strip you of the right to use cash PIT for that year.

Does cash PIT apply to sales to individual consumers? No, it applies only to B2B transactions documented with invoices.

What about deductible expenses under cash PIT? They’re recognised only once actually paid, mirroring the treatment of income.

What happens if a counterparty never pays, even after 2 years? After 2 years from the invoice issue date, you must recognise the income and pay tax regardless. The same applies if the business closes down first.

Checklist

Before switching to cash PIT

• Check your previous year’s income against the PLN 1 million limit
• Review your accounting method (simplified records required)
• Prepare the declaration choosing cash PIT
• Consult an accountant
• Submit the declaration to the tax office by February 20

After switching to cash PIT

• Set up an invoicing system that tracks payment dates
• Monitor payment deadlines closely
• Track the 2-year window for unpaid invoices
• Document all agreements when issuing corrections
• Regularly re-check the PLN 1 million income limit

Bibliography and Legal Basis

• Act of July 26, 1991, on Personal Income Tax (Journal of Laws 1991 No. 80, item 350), Art. 14c: the cash accounting method. Text on the ISAP portal: Dz.U. 1991 nr 80 poz. 350.

Author: MojaFirma Team.

This article is for informational purposes only and does not constitute legal advice. Every situation depends on the specific contract and individual circumstances. If something about your own situation isn’t quite clear, feel free to book a free consultation with our team.