If you run a business in Poland, you need to be extra diligent when it comes to paying taxes. Unless you’re a very small-time trader, chances are that you will be responsible for tax on your business profits. This means that even if your company makes only a small profit, you will have to declare any income and taxes on it. However, given the country’s relatively low corporate tax rate and its complex taxation rules, this shouldn’t be much of a concern as long as you keep things simple with regard to your business activities. Here we explain nine ways in which you can reduce the amount of taxes that your company pays in Poland.
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Register your business in Poland
For a business to be taxed in Poland, it must be registered with the relevant authorities. Doing so is simple and hassle-free. All you need to do is fill in the right paperwork and submit it to the right authorities. You will also need to make sure that your business’s name is valid and that it isn’t already being used by someone else. To register a business in Poland, you need to submit the following documents: – Business Registration Application form – this can be found online at the Panaewa Świętego website. Alternatively, you can visit the local Municipal Register Office. – Business Registration Licence – you can get this from the same register office that issued you the business registration form. – Proof of business’s assets – this can be either a bank statement showing the business’s account details or a title to a physical asset such as a building or a car. You can also use an attestation of assets (a document in which the witness attests that you own the assets you’re putting forward as proof of your business’s assets). – Proof of business’s liabilities – this can be either a copy of the account’s monthly statements or a letter from the bank that proves your business’s debts.
Pay your taxes on time
The best way to avoid tax audits in Poland is to pay your taxes on time. The authorities are allowed to audit any taxpayer for the amount of unpaid taxes and penalties, including interest on the late payment. In other words, if you don’t pay your taxes on time, you will be charged interest (normally around 1% of the amount you owe) as well. If you try to evade taxes, you will also be fined. Therefore, if you try to pay your taxes late, the penalties and interest charges will increase considerably. The best way to avoid late payment penalties is to pay your taxes in advance. Doing so not only reduces the risk of penalties and interest charges, but also keeps you from incurring a lot of interest charges over time.
Take advantage of the taxation benefits provided by authorised bodies
If you’re operating a business in Poland, it’s worth taking advantage of a number of tax benefits that are provided by the authorities so that you don’t end up paying too much tax. However, you need to be aware of the rules and make sure you take advantage of these benefits in the correct way. For example, you can get a reduced VAT rate for many goods and services if you’re purchasing them from an authorised body. Similarly, you can also claim tax credits for certain expenses that relate to the running of your business.
Keep a thorough record of all transactions and payments
One of the easiest ways to keep your company’s tax burden low is to do regular accounting. This means keeping a thorough record of all transactions and payments that your company makes. This is important because the authorities can ask for proof of all business expenses. This way, you can make sure that you don’t make any payments that are not related to the running of your company. You can also use accounting software to keep a record of all your company’s transactions and expenses. You can also use accounting software to make it easy to keep track of your business’s tax obligations. This way, you can make sure that you don’t pay tax on any income that isn’t taxable.
Don’t form an LLC in Poland for tax avoidance purposes
While an LLC is a great way to separate your business’s assets and liabilities from your own, it can also be a way to reduce your tax burden. This is because the profits earned by most LLCs are not taxed. To be taxed, you need to make a profit and pay taxes on it. The main advantage of forming an LLC is that it gives you a legal way to protect your business from lawsuits and allows you to shield your personal assets from liability if your company is sued. However, as discussed above, in order to avoid paying taxes, you need to change the nature of your business. Thus, if you form an LLC for tax reasons, you are simply obscuring your business’s true nature and violating the tax laws of Poland.
Conclusion
Taxation of businesses in Poland is very complicated, but it can be done with proper planning and knowledge of the laws. If you follow these tips, you should have no trouble paying less tax in Poland.
Thinking about starting a business? Are you looking for a place where you can develop? We recommend you to use the services of one of our friendly virtual offices!
