The right to change the tax year


Entrepreneurs may choose a settlement period other than the calendar year.

Tax year

Pursuant to Art. 11 of the Tax Ordinance, a tax year is equal to a calendar year, i.e. it lasts 12 months. It is counted from the first day of January to the end of December, unless the tax law provides otherwise. For example: contractual provisions (private law) cannot affect the duration of the tax year, which was clearly emphasized in the judgment of 28 November 2007 of the Provincial Administrative Court in Łódź, file ref. no. I SA / Łd 967/2007:

“The extension of the annual tax period, even if it results from the provisions of a civil law contract, should be considered unacceptable. In other words - irrespective of the parties' arrangements as to the accounting periods, the taxpayer's settlement with the State Treasury should take place annually. Consequently, irrespective of the provisions of this type of contract, the revenues received in a given tax year are subject to taxation for that year. If the parties set different dates of mutual settlement periods, such provision remains valid only between the parties to the contract. This does not exclude the possibility of a possible submission of a correction of the tax return, if, as a result of the performance of the contract, the amount constituting the tax base for a specific tax year would change. "

Taxpayers who are subject to the Corporate Income Tax Act have the right to choose a settlement period other than the calendar year. This group of entities includes, among others joint-stock companies, limited liability companies, limited joint-stock partnerships, foundations and associations.

Reasons for changing the fiscal year

There are various reasons why you choose a tax year other than the calendar year. First of all, it may be associated with periodic fluctuations in costs and revenues in the enterprise. This situation is often encountered when the economic period lasts more than 12 consecutive consecutive months.

The first year of a new taxpayer

Taxpayers who are just starting to operate under the Corporate Income Tax Act may set the tax year to be the same as the calendar year or another 12-month period. In order to be able to exercise this right, the entrepreneur must meet the following conditions:

1) the articles of association, articles of association or other document must provide for such a change

2) the taxpayer must notify the competent head of the tax office within 30 days from the date of commencement of economic activity.

The same obligations apply to taxpayers who change the tax year, but the notification should be made within 30 days from the end of the last tax year.

The given term as the term of substantive law may not be reinstated - for example, the individual interpretation of the Director of the Tax Chamber in Łódź of December 17, 2012, file ref. IPTPB3 / 423-323 / 12-2 / KJ.

For example, taxpayers whose tax year ends on December 31, 2013 have until January 30, 2014 to notify the tax authorities of the change.

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Tax year longer or shorter than 12 months

The tax year may be shorter or longer than 12 months. Its duration depends on the will of the taxpayer and the moment of establishing the economic activity - depending on whether it is the first or the second half of the calendar year.

Thus, when a taxpayer starts business activity in the first half of 2014 and adopts the calendar year for the tax period, his tax year will last until the end of 2014. In a similar situation to the fact that when the entrepreneur chooses a year that does not coincide with the calendar year, calendar year, its tax year will run from the date of the establishment of the activity to the last day of the selected period, but not longer than 12 consecutive calendar months.

On the other hand, when the taxpayer starts a business activity in the second half of the year, e.g. in September 2014, and the tax year is a period that coincides with the calendar year, then two options are available.

The first assumes that the tax year will last until the end of the calendar year (December 31, 2014). The second option covers the tax year until the end of the calendar year following the year in which the business started (31 December 2015).

Further changes to the tax year

Long-term entrepreneurs can change the tax year in the course of their business. After the modification, the tax year will be the period from the beginning of the month following the end of the previous year to the end of the newly adopted year. However, the duration of a new tax year may not be shorter than 12 and longer than 23 consecutive calendar months.