What is KPiR? A Complete Guide to Poland's Revenue and Expense Ledger

The Księga Przychodów i Rozchodów (KPiR), or Revenue and Expense Ledger, is the primary form of tax recordkeeping for most small and medium-sized entrepreneurs in Poland. It is a simplified form of bookkeeping that allows businesses to determine the income (or loss) from business activity, which serves as the basis for calculating personal income tax (PIT).

KPiR is not full accounting (pelna ksiegowosc) - it is simpler, cheaper to maintain, and available to businesses that do not exceed certain revenue thresholds.

Who Must Keep a KPiR?

Entities Required to Maintain KPiR

The obligation to keep a KPiR applies to:

  • Natural persons conducting non-agricultural business activity (sole proprietors / JDG)
  • Civil law partnerships (spolka cywilna) of natural persons
  • General partnerships (spolka jawna) of natural persons
  • Professional partnerships (spolka partnerska)

Provided these entities are taxed under the general rules (progressive scale at 12%/32%) or the flat tax (19%).

Who Does NOT Keep a KPiR?

KPiR is not maintained by:

  • Taxpayers on the lump-sum tax on recorded revenues (they keep a revenue register instead)
  • Taxpayers on the tax card (karta podatkowa)
  • Limited liability companies (sp. z o.o.), joint-stock companies, and other entities required to maintain full accounting books
  • Entrepreneurs whose net revenues in the previous year exceeded the equivalent of 2,000,000 EUR - these must transition to full accounting books

Threshold for Full Accounting

If your net revenues from the sale of goods, products, and financial operations for the previous fiscal year reached the equivalent of 2,000,000 EUR, you are required to maintain full accounting books from the new year. The conversion is calculated using the average NBP (National Bank of Poland) exchange rate from the first business day of October of the preceding tax year.

Structure of KPiR - Column by Column

The KPiR consists of 17 columns, each with a strictly defined purpose. Understanding the ledger's structure is essential for maintaining it correctly.

Identification Columns (1-4)

  • Column 1 - Sequential entry number
  • Column 2 - Date of the business event
  • Column 3 - Accounting document number (e.g., invoice number)
  • Column 4 - Contractor's name (company name)

Address Column (5)

  • Column 5 - Contractor's address

Description Column (6)

  • Column 6 - Description of the business event (e.g., "sale of programming services", "purchase of office supplies")

Revenue Columns (7-8)

  • Column 7 - Value of goods and services sold. This is where you enter revenue from the sale of products, trade goods, and services.
  • Column 8 - Other revenues (e.g., bank interest, subsidies, compensation).

Total Revenue Column (9)

  • Column 9 - Total revenue (sum of columns 7 and 8)

Cost Columns (10-12)

  • Column 10 - Purchase of trade goods and basic materials. This covers goods purchased for resale and materials directly used in production.
  • Column 11 - Incidental purchase costs (e.g., transportation, loading, insurance in transit).
  • Column 12 - Cash and in-kind remuneration. This includes gross employee salaries.

Other Expenses Column (13)

  • Column 13 - Other expenses. This is the broadest column, covering all other tax-deductible costs: rent, utilities, accounting services, telecommunications, fuel, depreciation, ZUS contributions (the portion that qualifies as a cost), outsourced services, and many more.

Total Expenses Column (14)

  • Column 14 - Total expenses (sum of columns 12 and 13)

Additional Columns (15-17)

  • Column 15 - Other items not listed in columns 1-14
  • Column 16 - Research and development (R&D) activity costs
  • Column 17 - Notes (additional information about the entry)

How to Properly Maintain a KPiR

Recording Deadlines

Entries in the KPiR should be made on an ongoing basis, in chronological order. Specific deadlines depend on who maintains the ledger:

  • Self-maintained - entries must be made by the 20th day of each month for the previous month
  • Maintained by an accounting office - documents must be delivered to the office in time for timely settlement, and the office makes entries by the 20th day of the following month

Accounting Documents

Every entry in the KPiR must be supported by an accounting document. Accepted documents include:

  • VAT invoices and non-VAT invoices
  • Receipts (rachunki)
  • Customs documents
  • Accounting notes
  • Internal documents (e.g., business travel expense reports)
  • Register receipts (paragony) - only in cases specified by regulations (e.g., highway tolls)

Numbering and Chronology

Entries must be numbered consecutively from the beginning of the tax year. You may not leave blank rows, delete entries, or make illegible corrections. Errors are corrected by striking through the incorrect entry and writing the correct one with an annotation and correction date, or by making a correcting entry.

Electronic vs Paper KPiR

Paper Format

The traditional form of maintaining a KPiR is a printed ledger in book form with appropriate columns. Before making any entries, the ledger must be bound and its pages numbered. This format is increasingly rare today.

Electronic Format

The vast majority of entrepreneurs maintain their KPiR electronically - using accounting software or a spreadsheet. Regulations require that the computer program ensures:

  • Ongoing determination of financial results
  • Printout of data in a format consistent with the KPiR template
  • Data storage on media that allow readability

When maintaining the ledger electronically, you do not need to print it on an ongoing basis, but you must be able to produce a printout upon request by the tax authorities.

Many accounting programs supporting KPiR are available on the market: wFirma, Fakturownia, inFakt, Comarch Optima, and Male Biuro Rachunkowe (MBR). Most accounting offices use professional systems such as Optima, Symfonia, or Rewizor.

Closing the Ledger and Physical Inventory

Physical Inventory (Spis z Natury)

At the end of the tax year (December 31) and on the day of starting business activity, the entrepreneur is required to prepare a physical inventory (remanent). The inventory covers:

  • Trade goods
  • Basic and auxiliary materials
  • Semi-finished products
  • Work in progress
  • Finished products
  • Defects and waste

The value of the physical inventory is entered in the KPiR as the last item of the year.

Calculating Annual Income

Annual income from the KPiR is calculated using the formula:

Income = Revenue - Expenses +/- Inventory Difference

The inventory difference is the difference between the physical inventory at year-end and the inventory at the beginning of the year. If the closing inventory is higher than the opening inventory, income increases. If lower, income decreases.

Document Retention

The KPiR along with supporting accounting documents must be retained until the tax obligation expires, which is generally 5 years counted from the end of the calendar year in which the tax payment deadline fell.

Example: Documents for the year 2025 (PIT tax payment deadline April 30, 2026) must be retained until the end of 2031.

Summary

The KPiR is the fundamental tax recordkeeping tool for natural persons conducting business activity in Poland. Although its structure may seem complicated (17 columns), in practice most entries go into a few key columns: 7 (sales revenue), 10 (purchase of goods), 12 (remuneration), and 13 (other expenses).

Maintaining a KPiR requires consistency and knowledge of basic accounting principles. If you are unsure whether you are classifying expenses correctly, it is worth using the services of an accounting office. Want to check how much tax you will pay at a given income level? Try our tax calculator.