You issue an invoice, the client delays payment — and you still have to pay income tax on money you have not received? This problem has troubled Polish entrepreneurs for years. The legislator's answer is cash-basis PIT (kasowy PIT) — a mechanism that lets you recognize revenue only when the payment actually arrives. From 2026, after the revenue limit was raised, far more businesses can use it. Check whether it is the right solution for you.

How does cash-basis PIT work?

Under the standard rules, revenue for PIT purposes arises on the date the service is performed, the goods are delivered or the invoice is issued — whichever comes first. This means you pay tax regardless of whether the client has actually paid. This is the so-called accrual method.

Cash-basis PIT reverses this logic. Under the cash method:

  • revenue arises only on the day you receive payment (in full or in part — an advance payment also counts as revenue),
  • tax-deductible costs are recognized only after you pay them — the mechanism works both ways,
  • if the client never pays, you still have to recognize the revenue no later than 2 years from the invoice issue date, or upon closing the business.

The cash method applies only to business-to-business (B2B) transactions documented with an invoice. Sales to consumers are settled under the general rules. For more on documenting sales correctly, see How to Issue an Invoice.

Who can choose cash-basis PIT in 2026?

Cash-basis PIT has been available since 1 January 2025, but initially only to the smallest businesses — the revenue limit was PLN 1 million. From 2026 the limit was raised to PLN 2 million, which significantly widens the group of eligible entrepreneurs.

You can use the cash method if:

  • you run a sole proprietorship (individually — not as a company or partnership),
  • your business revenue in the previous year did not exceed PLN 2 million,
  • you do not keep full accounting books — the revenue and expense ledger (KPiR) or a revenue register is sufficient,
  • you file a statement on choosing the cash method with the head of your tax office.

Importantly, cash-basis PIT works independently of your income tax form — you can combine it with the tax scale, the flat tax and the lump-sum tax on recorded revenue. Entrepreneurs starting a new business can choose the cash method right away, regardless of the limit.

How to opt in

  1. Prepare the statement on choosing the cash method of recognizing revenue.
  2. File it by 20 February of the tax year in which you want to apply the cash method. If you start a business during the year — by the 20th day of the month following the month you started.
  3. Apply the method for the whole year — the choice is binding until the end of the tax year and rolls over to subsequent years until you revoke it (the resignation is also filed by 20 February).
  4. Keep a register of invoices settled on a cash basis — you need to know which invoices have been paid and when.

Keep this and other deadlines in mind when planning your year — our entrepreneur's compliance calendar will help.

Cash-basis PIT vs cash accounting for VAT — not the same thing

Beware of a common misunderstanding: cash-basis PIT concerns income tax, while a separate cash accounting scheme for VAT exists for small taxpayers. You can use either one, both, or neither — these are independent choices. If you are an active VAT payer and also want to pay VAT only after receiving payment, you must separately opt for the VAT cash scheme (by updating your VAT-R form).

When does cash-basis PIT pay off?

The cash method is particularly beneficial when:

  • clients pay late — you do not finance tax on money you have not yet received,
  • you work with long payment terms (e.g. 60–90 days), typical in construction or corporate services,
  • your revenue is seasonal and cash flow matters to you.

There are, however, situations where cash-basis PIT is neutral or even inconvenient:

  • costs are also settled on a cash basis — if you buy with deferred payment terms, you deduct the cost later,
  • more record-keeping — you have to track the payment date of every invoice, which can be burdensome without good accounting software,
  • if your clients pay you immediately or in advance, the cash method changes practically nothing.

Example

Anna runs a design studio and on 15 December 2026 issued an invoice for PLN 50,000 net with a 60-day payment term. The client paid on 10 February 2027.

  • Accrual method: revenue arises in December 2026 — tax on PLN 50,000 must be included in the December advance payment and in the 2026 annual return, despite no payment received.
  • Cash method: revenue arises in February 2027 — the tax appears only in the 2027 settlement, when the money is already in the account.

With large amounts and many invoices, the difference in cash flow can be substantial.

Is it worth it?

If you run a sole proprietorship, fit within the PLN 2 million limit, and have ever chased a client over an overdue invoice while paying tax on that very revenue — cash-basis PIT deserves serious consideration. It is a real liquidity improvement without changing your tax form. Just remember the opt-in deadline (20 February) and the fact that costs are also deducted only after payment.

Wondering whether the cash method would benefit your business? Contact LinTax — we will analyze your cash flows and handle the formalities.