Instructions for storing tax and wage evidence

The storage of accounting evidence and other records and records, which are also relevant to tax matters, is regulated by both legislation. 1) Act on 29 September 1994 on accounting 1 , Next: u.o.r. (Article 73(74)), and 2) Act on 29 August 1997 - Tax Ordinance 2 , Next: o.p. (Article 32(86)).

In the article, the author addresses issues concerning: document storage periods; suspension of the tax limitation period resulting in an extension of the period of mandatory document and registration; conditions for document storage, including electronic invoices and fiscal receipts; consequences of the destruction or loss of documentation.

1. Comment

1.1. Minimum retention period applicable

Article 74 u.o.r. defines minimum storage periods:

1) accounts – this is 5 years;

1. Staff remuneration cards or equivalents shall be kept for the period of the required access to this information resulting from pension, pension and tax rules, but not less than 5 years Article 125a(4) Act on 17 December 1998 on pensions from the Social Insurance Fund 3 , hereafter: u.e.r.FUS, employers should keep pay lists, salary cards, and other evidence on the basis of which the pension base is established, for a period of time 50 years after the end of work with the contributor;
2. accounting evidence of receipts from retail sales, until the date of approval of the financial statements for the financial year in question (but not less than the settlement date of the persons entrusted with the assets covered by the retail sale);
3. accounting evidence concerning fixed assets under construction, loans, loans and commercial contracts, claims under civil proceedings or criminal or tax proceedings, by 5 years from the beginning of the year following the financial year in which the operations, transactions and proceedings were definitively completed, repaid, settled or expired;
4. documentation of the accounting method adopted — period not less than 5 years after the expiry of that dossier;
5. warranty and complaint documents — 1 one year after the date of expiry of the warranty or settlement of the complaint;
6. inventory documents – 5 years;
7. other accounting evidence and documents – 5 years.

The storage periods concerned shall be calculated from the beginning of the year following the financial year to which the documents relate.

It is also worth noting that by virtue of the Act of 10 January 2018 amending certain laws in connection with the shortening of the retention and electronicisation of employee files 4 , Staff documents may be kept for a period of time 10 years (yet) 50 years), and the paper-matched form becomes an electronic form.

Approved annual accounts shall be kept for a period not less than 5 years from the beginning of the year following the financial year in which they were approved. This rule also applies to accounts for financial years beginning before 1 January 2019 (Article 43(2) Act on 9 November 2018 amending certain laws to introduce simplifications for entrepreneurs in tax and economic law 5 (Further: u.u.p.p.g.).

Example

Inventory relating to 2016 held In January 2017 The inventory documents (including the protocol) should be kept to the end 2021

The period of retention of documents for tax purposes depends on the time when the tax obligation to which the document relates is to expire. This is directly due to Article 86 o.p.: ‘taxable persons obliged to keep tax books shall keep books and documents relating to their keeping until the expiry of the limitation period of the tax obligation’.

Similarly, the obligation for payers to keep records, including personal income tax payers on remuneration (Article 32 ‘Payers and collectors shall keep documents relating to the collection or collection of taxes until the expiry of the period of limitation of the obligation of the payer or collector’. It cannot be denied that there is no correlation between accounting and tax legislation.

Judgment

Article 74 u.o.r.

defines the obligation to keep certain accounting documents for balance sheet purposes only and, although clearly inconsistent with the regulation contained under Article 86 O.p., which orders taxable persons obliged to keep tax books and documents relating to their keeping until the expiry of the limitation period of the tax obligation, cannot apply to tax matters.

Shown lack of consistency between the provision Article 74 ed Article 86 o.p. cannot release – and does not exempt – the obligations arising for taxpayers from the provisions of the o.p. 6 .

The analysis of tax rules shows that it is essential that documents affecting the amount of tax obligations be kept until the limitation period for those obligations. In the light Article 70(8) the tax liability secured by mortgages or by a tax liability is not subject to limitation.

However, such a provision was opposed by the Constitutional Tribunal in its judgment of 8 October 2013 7 Recognising that this provision opposes the constitutional principle of equality with the law (taxable persons without the aforementioned assets, i.e.

with only cash, they can count on limitation – unlike taxpayers whose assets the tax authority has secured in the form of a mortgage or a tax lien). The Court called for a change of law in this respect.

As a general rule, in the case of legal liability (which includes the vast majority of liabilities, including VAT, corporation tax, personal income tax and excise duties), the limitation period is 5 years starting from the end of the year in which the tax payment deadline expired.

Example

Company X sold A 5 November 2012, a product B – 10 December 2012 On both of these days (sale) the company issued invoices.

In the light of VAT provisions (current In 2012) the tax liability was created, as appropriate, 5 November 2012 and 10 December 2012 Tax In the first the case should be paid to 27 December 2012 (5 years from 1 January 2013), In the second – on 25 January 2013 (5 years from 1 January 2014).

Therefore, in the first case, the tax liability will be regarded as limitation 1 January 2017, a In the second – The limitation is a year later. With regard to corporate income tax regulations, the limitation period (in both cases) expired 31 December 2018

1.2. Suspension of the limitation period

It is also worth keeping in mind the recipe Article 70(6) o.p., according to which the limitation period for a tax liability does not begin and the start date is suspended, as from:

• 1) Initiating the procedure fiscal criminal offence or fiscal misdemeanour, if the suspected offence involves non-execution of that obligation (provided that the taxable person is notified of the initiation of the procedure);
• 2) to bring an action before the administrative court on a decision relating to that obligation;
• 3) to request the general court to establish the existence or non-existence of a legal or legal relationship;
• 4) the provision of a security (...) or the provision of a security under the law on enforcement in the administration;
• 5) the notification of entry into the security in certain cases Under Articles 32a(3) and 35(2) Act on 17 June 1966 on enforcement proceedings in the administration 8 (Further: u.p.e.a.);

1. the submission by the Head of the KAS, at the request of the party concerned. 119 hours section 2 o.p., the opinion of the Council on the prevention of tax avoidance as to the appropriateness of application Article 119a s.p. or contractual benefit mitigation measures.

The suspension of the limitation period at the same time prolongs the period of compulsory retention of documents and records.

As a general rule, in the case of obligations arising from the service of a decision (relatively rare case occurring primarily when the taxable person is a natural person), a tax liability does not arise if the decision establishing that obligation was served after the expiry of the 3 years from the end of the calendar year in which the tax obligation arose. However, if the taxable person has not made a declaration within the time limit laid down in the tax legislation or in the declaration has not disclosed all the data necessary to determine the amount of the tax liability, the tax liability shall not arise if the decision fixing its amount has been served upon expiry 5 years from the end of the calendar year in which the tax obligation arose.

Important: if the provisions no longer require the storage of documents and their longer storage is not economically justified, they must be destroyed (Commission) in order to protect the confidentiality of the information contained therein.

1.3. Conditions for the storage of documents

1.3.1. Specific solutions

The conditions for the storage of documents should ensure that they have sufficient durability to reach the specified deadline in the unaltered state. These requirements include both access protection by unauthorised persons (access control) and the provision of certain environmental parameters (temperature, moisture, light protection).

In particular, the above applies to external documents (received from counterparties) since in the case of a large part of documents generated by the taxpayer, lost or destroyed copies can be reproduced from an electronic medium (of course provided that their electronic image is stored there long enough).

Important: in the case of a natural person (entrepreneur), the place of storage of documents and records should be reported to the competent municipal office (diversaries) on the form CEIDG-1 (fields 21 and 22). Similarly, a change to this site is to be reported.

In the case of books that are usually kept electronically as well as other information recorded on information media, backups should be made regularly (usually daily). At least some of these copies should be stored in another building or part of the building than the work files. This should allow for the reproduction of records in the book if these files would be destroyed by sudden, large-scale events (e.g. fire or flood).

1.3.2. Electronic invoices

Under special conditions, VAT invoices may take electronic form and in this form may be sent to the counterparty. VAT invoices may be sent, including via e.g. the possibility of downloading from the server, in any electronic format, provided that the invoice is accepted by the recipient (Article 106n Act on 11 March 2004 on tax on goods and services 9 (Next: the VAT Act).

In addition, they should be guaranteed (Article 106m the VAT Act):

• 1) the authenticity of the origin of these invoices, i.e. the certainty of the identity of the supplier of the goods or services or the issuer of the invoice, and
• 2) Integrity of content – that is, to protect against any changes in data.

The invoices sent by electronic means shall be kept by reference period in any way ensuring:

• 1) the authenticity of the origin, the integrity of the content and the readability of these invoices from the time of their issue until the expiry of the limitation period of the tax obligation;
• 2) easy to find;
• 3) immediate access to them at the request of the tax authority or the tax control authority, in accordance with separate provisions.

VAT invoices sent in electronic form may also be stored in electronic form outside the territory of the country, provided that the tax authorities are provided with electronic access to them online.

1.3.3. Fiscal receipts

The archiving of receipts is now regulated Regulations of the Minister of Finance from 29 April 2019 on register offices (section 6 section 1 point 7). The receipts shall certify the registration of the sales through the registration cashier (relatively a printer with similar functions).

From 1 January 2013 valid 5-year the period of storage of receipts, which, for obvious reasons, can be made easier by making electronic copies of them (of course, on those devices which have been adequately equipped by the manufacturer).

This process should allow storage of data in electronic format by 5-year period, more precisely, until the limitation period expires.

1.4. Failure or liquidation of the taxpayer (payer)

In the event of liquidation, bankruptcy or other dissolution of the situation of a legal person or an entity without legal personality, the competent U.S. (at the latest on the last day of the existence of that legal person or entity) should be notified of the place of storage of tax books and documents relating to their conduct (Article 86(2) o.p.).

A similar requirement applies to documentation produced by payers (Article 32(1a) O.P.), where:

1. from the provisions Article 32(2) It follows that, after the expiry of the period during which documents should be held, the payers are obliged to provide the taxable persons with documents relating to the collection or collection of taxes; documents shall be destroyed if their transfer to the taxable person is impossible;
2. in the light Article 51u(1) Act on 14 July 1983 about national archival resources and archives 10 ((a) where the employer is put in liquidation or declared bankrupt, the liquidator or bankruptcy administrator respectively shall indicate the entity carrying out the record-keeping activity to which it will be transferred for further storage, providing financial means for that purpose for the period remaining until the end of the retention period applicable to that type of documentation.

If such means (former) cannot be provided by the employer, it does so by the Archives of Personal and Payment Documentation in Milanówek near Warsaw.

1.5. Effects of destruction or loss of documentation

The most important effect of the destruction or loss of the documentation is the risk of establishing a tax liability (instead of the values shown in previously submitted declarations) by the tax authority (tax control). This estimate should be made in such a way that its result is as close as possible to the actual values (achieved by the taxpayer, but impossible to establish accurately).

Judgment

Tax authority based on Article 23 o.p. only reproduces the value of transactions actually executed by the taxpayer.

The assessment of the tax base in this case is a procedural action of the body whose purpose is to determine the value of transactions carried out by the taxable person, to the extent that the taxable person has established those values with his counterparties.

The Authority is required to assess the tax base to take all necessary measures to determine this value as closely as possible to the actual content of transactions made by the taxpayer.

This obligation derives from the wording of the provision Article 23(5) The assessment of the tax base is therefore not a process of omitting the actual value of the transactions carried out by the taxpayer, but is an action aimed only at restoring that value[11].

2. Explanations to the model instructions for storing tax and wage evidence

2.1. Persons responsible for keeping accounting records

Documentation storage, including accounting evidence, has been defined as one of the accounting elements of the entity (Article 4(3)(6) u.o.r.), therefore the accounting department usually has responsibilities in this respect.

Where the service is provided by an accounting office, it is obliged to keep records (on the basis of the source documents received from the client within the specified time limit) and keep accounting documents.

For practical reasons, after the end of a certain period of storage by the accounting office, documents may be returned (these questions are regulated by the accounting service contract).

2.2. Purpose of record keeping

The purpose of storing documentation is not only to ensure formal compliance with the provisions of u.o.r., but also to ensure that the information contained in archived accounting documents can be effectively accessed. The lack of access to documents by tax authorities – before the deadline expired – leads to the risk that tax authorities will assess the value of the tax.

2.3. Procedures

They may vary according to the internal structure of the unit and the functions performed by the individual parts of the unit.

However, these procedures should ensure in particular:

• 1) compliance with the requirements of o.p. and u.o.r.,
• 2) the achievement of internal control objectives,
• 3) easy access to source documents as part of the current work of the accounting department.

Documents and records should be kept until the limitation period for the tax liability expires. Although in most cases the limitation period for tax liability expires 5 years after the end of the year on which the tax payment deadline is due, however, this is not a universal rule.

In practice, the limitation period is quite often later – for example, when there are events causing the limitation period to be suspended (Article 70(6)(7), Article 99 o.p.), it is therefore important that existing procedures do not cause automatic destruction of documentation after the expiry of 5 years after the end of the year in which the tax should be paid.

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Legal basis

• Article 125a(4) u.e.r.FUS,

• Article 51u(1) n.z.a.,

• Article 23(32)(70)(6), Article 86 o.p.,

• Article 4(3)(6), Article 73(74) u.o.r.,

• Article 106m(106n) the VAT Act,

• Article 43(2) u.u.p.p.g.

1 Journal of Laws of 2019, item 351.

4 Journal of Laws of 2018, item 357.

5 Journal of Laws of 2018, item 2244.

7 reference no. SK 40/12, Legalis.

The article comes from the book C.H. Beck "Bookkeeping and Tax Instructions" under ed. prof. nadzw. dr. hab. Artur Hołda, plus CD, ed. 2, 2020, https://www.ksiegarnia.beck.pl/19340-instrukcje-ksiegowe-i-podatkowe-artur-holda