Mistakes of novice entrepreneurs in the VAT settlement


Beginning entrepreneurs struggle with a number of formalities. If the company is a VAT payer, there are additional obligations that are easy to forget. Find out what are the mistakes of novice entrepreneurs in the VAT settlement and learn to avoid them.

Mistakes of novice entrepreneurs - exceeding tax deadlines

Beginning entrepreneurs often confuse the deadline for paying the advance income tax with the deadline for paying VAT. So let's remind you by when to what tax should be paid:

  • value added tax (VAT) - by the 25th day of the month following each month (in quarterly settlement by the 25th day of the month following each quarter),

  • advance payment for income tax: on general principles or a flat tax - by the 20th day of the month for the previous month, lump sum on recorded income - by the 20th day of the month, tax card by the 7th day of the month.

Beginning entrepreneurs' mistakes and failure to report their activity

As a rule, entrepreneurs starting a business are entitled to a VAT exemption (Article 113 (1) and (9) of the Value Added Tax Act) due to the turnover limit of up to PLN 150,000. zloty. If the entrepreneur fails to report his activity to the tax office on the VAT-R form, he generally benefits from the exemption. Failure to register has consequences for buyers who will not be able to deduct VAT.

Mistakes of novice entrepreneurs - wrong calculation of the VAT amount

The first serious mistake in calculating the amount of VAT is trying to deduct VAT on personal, non-business related expenses. A problem for a novice entrepreneur may be, in particular, the settlement of fuel for passenger cars used for mixed purposes, where the possibility of deducting 50% of the VAT amount will be available only from July 1, 2015.

It is worth recalling that there are also other expenses from which VAT cannot be deducted. These are:

  • accommodation services,

  • catering services.

Mistakes of novice entrepreneurs - the use of incorrect VAT rates

Novice entrepreneurs may also have problems determining the correct VAT rates. It is often the case that they discount their rates, especially when it comes to construction services.

The problem may also be the excess of input VAT (on purchase) over due VAT (on sales). The taxpayer has the right to either apply for a refund of the surplus or to transfer it to the next accounting period. Be careful that the amounts are the same. Otherwise, it will be necessary to submit a correction of the declaration along with an explanation.

It also often happens that the VAT return is filled out incorrectly due to billing errors. Taxpayers simply make mistakes in the calculations, e.g. when rounding.