The flat rate also needs to keep invoices for purchases!
A characteristic feature of the lump sum on recorded revenues is that it does not take into account tax deductible costs, and the tax is calculated on the income. As a result, what should the flat rate payer do with the cost invoices? Should he keep them anyway?
Purchase invoices with a flat-rate fee
The flat-rate fee is also required to store purchase invoices as provided for in Art. 15 of the Lump-sum Income Tax Act. Pursuant to these regulations, taxpayers paying on a lump-sum basis are required to have and store proofs of purchase of goods, keep records of fixed assets and intangible assets and, separately for each tax year, a record of revenues. These documents should be kept at the place of business or in the accounting office entrusted with keeping the records. Further in the act, you can find the provision that the proof of purchase should be understood as bills, receipts, purchase invoices, a description of the goods received and internal proofs.
Flat rate and physical inventory
The above-mentioned act clearly specifies that the flat-rate taxpayer must have documents regarding the purchase of goods. On their basis, a physical inventory was prepared. In the physical inventory, the flat-rate fee was to include, respectively:
- materials, basic and auxiliary raw materials,
- semi-finished products,
- shortages and waste,
- commercial goods,
- finished products and work in progress.
Physical inventories were prepared on the day of commencement of business operations and the end of each tax year, as well as in the event of a change in the articles of association or a partner's termination or liquidation of the business.
From 2019, the obligation to draw up a physical inventory and keep an employee income card does not apply to taxpayers paying a registered lump sum. Additionally, they are not obliged to keep equipment records, so they do not have to check the compliance of the equipment records with the actual state at the end of the year and explain any irregularities. Despite the lack of an obligation to prepare a physical inventory, it is worth carrying out an inventory voluntarily for control purposes. It can also be of assistance during a tax audit to determine the margin of the goods sold.
How will the flat-rate fee price the goods and services?
Purchase invoices with a flat rate fee will also be useful for the valuation of goods and other components. The basic rule is to use the purchase prices, and in the absence of documents - the market prices of a given component.
It is worth remembering that a flat-rate fee may also be an active VAT payer and settle VAT on a monthly or quarterly basis. In such a situation, purchase invoices will be the basis for deduction of input VAT.