Accounting and audit
Accounting requirements
According to the Polish Accounting Act the books of accounts shall be kept in an accurate and verifiable manner, without errors and on an up to date basis. Accounting books have to be kept in Polish currency (PLN) and in Polish language, meaning that the Chart of Accounts and descriptions of transactions recorded in the accounting books should be kept in Polish language. Companies should also have an Accounting Policy drawn up and approved by the Management Board in place. Polish accounting and tax law gives specific requirements for exchange rates that are to be used when translating amounts expressed in foreign currencies into PLN for accounting books and for tax purposes.
The Company’s ERP system should be able to produce an XML Standard Audit File for Taxes in a specific structure published by the tax authorities (JPK_KR), which includes the accounting books of a Company, namely Trial Balance, Journals and individual accounting entries made in General Ledger and sub-ledgers. Such a file may be requested by the tax authorities during a tax audit or tax proceedings.
The Polish Accounting Act requires that the accounting books are stored for a period of five years, counted from the end of the year in which they were approved.
Under Polish law, companies must keep accurate, updated books in Polish and PLN, generate a tax-ready Standard Audit File, and retain these records for five years.
Annual Statutory Financial Statements
Annual Statutory Financial Statements have to be prepared in Polish language. The deadline for preparation is three months after the end of the financial year. The deadline for approving the Statutory Financial Statements by shareholders of the Company is six months after the end of the financial year. Approved Statutory Financial Statements have to be submitted to the National Court Register within 15 days of approval or within 15 days of the deadline for approval, whichever is earlier.
The Statutory Financial Statements have to be prepared electronically in an XML format in a specific format published by the Ministry of Finance. As such, they need to be signed by all Management Board Members of the Company using qualified electronic signatures.
The Polish Accounting Act allows for a simplified version of the Statutory Financial Statements to be drawn up by micro entities and small entities. In order for micro entities and small entities to benefit from this opportunity, an appropriate resolution needs to be taken by the shareholders of the Company.
The Accounting Act defines small entities as entities which during the financial year for which they draw up the Statutory Financial Statements, and during the preceding year, did not exceed more than one of the following three values:
- 17 000 000 PLN for total balance sheet asset value at the end of the financial year
- 34 000 000 PLN for net revenues from sales of goods and products for the financial year
- 50 persons for average annual full time employment
Audit requirements
Annual financial statements for most entities are audited if in the financial year preceding the year for which the Statutory Financial Statements are prepared the entity fulfilled at least two of the following three conditions:
Average annual full time employment was equal to or exceeded 50 persons
Value of total assets at the end of the financial year was equal or exceeded EUR 2 500 000
Net revenues from the sales of products and goods, as well as financial transactions for the financial year were equal to or exceeded EUR 5 000 000
The amounts in EUR have to be translated into equivalent in PLN at the exchange rate published by the National Bank of Poland as at the end of the preceding financial year.
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