The goods have been delivered, the service performed, the invoice issued — and there is still no money in the account. The VAT on that invoice must nevertheless be settled, because under the general rules the tax obligation arises when the goods are delivered or the service is performed, regardless of whether the customer has paid. For a sole proprietorship working with 30-, 60- or 90-day payment terms, this is one of the most common causes of cash-flow problems. The cash accounting method for VAT (in Polish: „metoda kasowa”) allows the moment of settlement to be shifted to the day the money actually arrives.
What the cash accounting method for VAT involves
The cash accounting method, governed by Article 21 of the Polish VAT Act, reverses the standard settlement logic. You report output VAT on a sale only once you have received payment — not earlier. The arrangement works symmetrically, however: input VAT from purchase invoices may likewise be deducted only after you have settled your liability towards the supplier. Until you pay your contractor, that invoice will not reduce the tax you owe.
The cash accounting method for VAT should not be confused with „kasowy PIT”, the cash method in income tax. These are two independent arrangements, based on different provisions, with separate conditions and separate notifications. You may choose one of them, both, or neither — a decision on one does not determine the other.
Who can use it: small taxpayer thresholds in 2026
The cash accounting method is reserved for small VAT taxpayers (in Polish: „mały podatnik”). The basic threshold is the equivalent of EUR 2 million in gross sales for the previous tax year. Amounts expressed in euro are converted at the average National Bank of Poland rate from the first business day of October of the preceding year, rounded to PLN 1,000. The rate of 1 October 2025 was PLN 4.2586, so in 2026 small VAT taxpayer status is available to an entrepreneur whose sales including tax in 2025 did not exceed PLN 8,517,000.
A separate, considerably lower threshold applies to so-called small intermediaries — brokers, investment fund managers, agents, contractors, commission sellers and providers of similar services. For them, what counts is not total sales but the amount of commissions received including tax, and the threshold is the equivalent of EUR 45,000, that is PLN 192,000 in 2026. An entrepreneur who is only just starting out has small taxpayer status immediately — there are no prior-year sales to compare against the threshold.
When the tax obligation arises: payment and the 180-day deadline
Under the cash accounting method, the moment of VAT settlement depends on whom you sell to. If the buyer is an active VAT taxpayer, the tax obligation arises on the day you receive full or partial payment — with no cut-off date at all. As long as the contractor does not settle the invoice, the tax does not become due. This is the strongest feature of the arrangement: the risk of late payment does not automatically translate into an obligation to fund the VAT out of your own pocket.
The position is different for sales to an entity that is not an active VAT taxpayer — a consumer, an entrepreneur benefiting from an exemption, or a body outside the register. Here too the tax obligation arises upon receipt of payment, but no later than the 180th day counting from the day the goods were released or the service was performed. After that deadline, VAT must be settled regardless of whether the money has come in.
Where payment is partial, the tax obligation arises only in respect of the amount received. It is also worth remembering that the cash accounting method does not cover all transactions — intra-Community acquisitions of goods, the import of services and other activities specified in the Act are settled under the general rules, according to the standard moment at which the tax obligation arises.
Formalities: VAT-R, the invoice annotation and JPK_V7K
The choice of the cash accounting method is notified to the head of the tax office on form VAT-R — in practice, this is an update of the registration application. The notification must be submitted no later than the end of the month preceding the period from which the method is to apply. Since cash accounting goes hand in hand with quarterly settlement, this means a deadline at the end of the month preceding the given quarter — for example, 31 December if the method is to apply from the first quarter.
Every sales invoice issued under this regime must carry the annotation „metoda kasowa” (cash accounting method). This is not a meaningless formality — the marking informs the buyer that they may deduct the VAT on that invoice only after making payment. From 1 April 2026, sole proprietorships issue invoices through the National e-Invoicing System (KSeF), and the marking requirement remains in force within the e-invoice structure as well.
The cash accounting method entails quarterly VAT settlement: the JPK_V7K file is filed by the 25th day of the month following the quarter. There is, however, an important exception — for the first 12 months following registration as an active VAT taxpayer, returns are filed monthly using the JPK_V7M structure, even where the taxpayer settles under the cash method. Only after that period may the taxpayer move to quarterly settlement.
When it pays off, when it does not, and how to opt out
The cash accounting method benefits most those businesses that sell B2B on long payment terms while themselves buying for cash or paying suppliers immediately. In that configuration, output tax is deferred while deduction occurs without delay. The opposite set-up — mainly consumer sales paid immediately, combined with purchases on deferred terms — works against you: output VAT falls due quickly anyway, while deduction is pushed back to the moment purchase invoices are paid. On top of that, sales to non-VAT-registered buyers are subject to the 180-day limit mentioned above.
The organisational burden also matters. Cash accounting requires tracking the payment date of each sales and purchase invoice individually, not merely the date of issue. With a large volume of documents, that means real additional work on the accounting side.
You may opt out of the cash accounting method, but no earlier than after 12 months of applying it, following prior written notification to the head of the tax office submitted by the end of the quarter in which the method was applied. The right to cash accounting is also lost by operation of law once the small taxpayer threshold is exceeded — starting with the settlement for the period following the quarter in which the threshold was crossed.