Banking revenues and costs - correct settlement in the KPiR
Banking income and expenses associated with running a business account are usually not large amounts per year. However, opening and running a company bank account, especially among novice entrepreneurs, may raise some doubts. Invoices are not used in recording banking revenues and costs recognized in the KPiR. Read the article and find out what we count as banking income and costs related to running a business account and how to properly document them!
Banking income - what do we include?
Banking revenues related to running a company account are benefits that are associated primarily with:
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interest on funds accumulated in the bank account and deposits,
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revenues from loyalty programs,
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receipts from money back services (also known as cash back), which consist in the bank returning a part of funds from transactions carried out with a payment card.
The document confirming the creation of bank revenues is the bank statement, which shows the amount of interest and funds accumulated on the account. Banking revenues should be included in column 8 of the KPiR as other revenues.
Banking costs - what do we include?
The tax-deductible costs related to running a bank account by entrepreneurs include, among others:
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account maintenance fees,
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transfer fees (e.g. express transfer, foreign transfer),
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payment card fees,
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commissions for withdrawals at ATMs belonging to other banks or cash withdrawals abroad,
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additional fees (e.g. for a paper account statement),
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commissions for currency transactions.
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Important!
Pursuant to Art. 22 sec. 1 of the Personal Income Tax Act, deductible costs are the costs incurred in order to achieve income, maintain or secure the source of income, with the exception of the costs listed in Art. 23. Therefore, in order to include expenses as tax costs, they must be:
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All bank charges should be included in column 13 of the KPiR as other expenses.
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How to document banking income and expenses?
Banking income and expenses related to running a business account must be properly documented. In this case, no VAT invoices are required. Relevant documents that are sufficient to recognize bank charges as tax deductible costs are bank statements or confirmations of certain transactions, which include the amount of the charges and their purpose, e.g. details of the account owner, transaction date and transaction details. It does not matter what costs and revenues are mentioned. These can be both fixed or one-time commissions and fees, as well as interest income on savings accounts.
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Important!
Entrepreneurs using one bank account for private and business purposes must remember that they can only settle expenses related to running their business. It should be ensured that commissions and fees related to private transactions are kept separate from those related to corporate matters. |
Is the money back service really tax revenue?
The money back service is a relatively new financial service, therefore it may raise some kind of doubts. According to the banks, this service is a bonus sale and in accordance with Art. 21 sec. 1 point 68 of the Personal Income Tax Act, up to the amount of PLN 760 exempt from tax. However, tax authorities often have a different opinion, claiming that for the entrepreneur this service is income from other sources and is subject to taxation.
The tax exemption of awards related to bonus sales of goods or services does not apply to awards received by the taxpayer in connection with his non-agricultural activity, constituting income from this activity. Therefore, if the taxpayer receives money from the money back service, he should independently consider it as income, regardless of whether it exceeds the amount of PLN 760 or falls within the amount limited by this limit.
