Amendment to the Polish Accounting Act – key changes effective from 2025 onwards

On December 12, 2024, the President of Poland signed an amendment to the Accounting Act, introducing a range of significant changes for businesses operating in the country. The new regulations, implementing the EU’s Corporate Sustainability Reporting Directive (CSRD), focus on ESG (Environmental, Social, and Governance) reporting, raising revenue thresholds for mandatory bookkeeping. Below, we outline the most important changes and their implications for companies.

• Changes in revenue thresholds for full accounting obligations in Poland
• Higher thresholds for mandatory financial audits
• New definitions of micro, small, and medium sized entities
• Mandatory ESG reporting – a step towards sustainability

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Changes in revenue thresholds for full accounting obligations in Poland

Effective January 1^st, 2025, the revenue thresholds requiring businesses to maintain full accounting records will be raised. Under the amended Accounting Act, this threshold increases from the current EUR 2 million to EUR 2.5 million.

The new threshold applies to:

• sole proprietorships
• civil partnerships of natural persons
• general partnerships of natural persons
• professional partnerships of natural persons
• enterprises maintained under the rules of succession.

In practice, businesses with net revenue from sales of goods and products for the 2024 fiscal year equivalent to at least EUR 2.5 million (calculated using the National Bank of Poland’s exchange rate 4.2846 PLN/EURO dated October 1^st, 2024, equaling approximately PLN 10,711,500) will be required to keep full accounting records starting from the fiscal year beginning after December 31, 2024.

What are the consequences of exceeding the limit?

Maintaining full accounting records entails more detailed and complex bookkeeping, including:

• Recording all business transactions, whether or not they affect taxable income.
• Preparing financial statements in compliance with established standards.
• Submitting annual financial statements to the National Court Register in Poland (KRS) or the Polish National Tax Administration (KAS).

For more information on full accounting, visit our page: Full Accounting and Accounting Services.

Benefits for businesses with lower revenue

Raising the threshold will allow smaller businesses to continue using simplified bookkeeping methods, such as the Tax Revenue and Expense Ledger (PKPiR). This will reduce administrative and financial burdens, a critical benefit during challenging economic conditions.

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Higher thresholds for mandatory financial audits

The amendment to the Accounting Act also raises the thresholds beyond which entities are required to have their financial statements audited by an independent auditor. These changes aim to ease operational requirements for smaller entities while maintaining the audit obligation for larger businesses whose activities significantly impact the market.

New thresholds after the changes

The 25% increase in the thresholds means that, from 2025 onwards, entities will be required to audit their financial statements if their financial data for the financial year exceed the following values:

• Total assets: Raised from €2.5 million to €3.125 million (approximately PLN 13,389,375).
• Net revenue from sales: Raised from EUR 5 million to EUR 6.25 million (approximately PLN 26,778,750).

The criterion regarding average annual employment remains unchanged at a minimum of 50 employees on a full-time equivalent basis.

These provisions primarily apply to limited liability companies, general partnerships, professional partnerships, limited partnerships, civil partnerships, and sole proprietorships.

The new regulations will apply to fiscal years beginning after December 31, 2024, the compliance of the thresholds decided based on net revenue from sales of goods and products for the fiscal year starting after December 31^st, 2023.

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New definitions of micro, small, and medium sized entities

As part of the amendment to accounting regulations, changes have been introduced to the definitions of micro, small, and medium-sized enterprises. The new rules raise the financial thresholds for these categories by 25%.

Under the updated regulations, the definitions of micro, small, and medium-sized enterprises have been aligned with the revised financial thresholds, which are based on the value of total assets and net revenues from the sale of goods and products. Additionally, the employment criteria, which also determine qualification for the appropriate category, remain unchanged.

Micro entities

A business is classified as micro if, in both the current and preceding fiscal year, it does not exceed two of the following three criteria:

1. Total assets at the end of the financial year – up to PLN 2,000,000.
2. Net revenue from the sale of goods and products for the financial year – up to PLN 4,000,000.
3. Average annual employment in full-time equivalents – up to 10 employees.

Losing micro status takes place when two of the above mentioned criteria have been hit within two  consecutive fiscal years.

Small entities

A small business must meet the following criteria:

• Total assets at the end of the financial year – up to PLN 33,000,000.
• Net revenue from the sale of goods and products for the financial year – up to PLN 66,000,000.
• Average annual employment in full-time equivalents – up to 50 employees.

Similar to micro entities, losing small entity status requires exceeding two criteria for two consecutive years.

Medium entities

A medium entity exceeds the thresholds for a small entity but does not meet the criteria for a large entity. The limits for medium entities are:

• Total assets at the end of the financial year – up to PLN 110,000,000.
• Net revenue from the sale of goods and products for the financial year – up to PLN 220,000,000.
• Average annual employment in full-time equivalents – up to 250 employees.

Large entities

While not explicitly defined in the legislation, businesses exceeding the thresholds for medium entities in the fields of total assets, turnover and average employment are generally considered large.

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Mandatory ESG reporting – a step towards sustainability

The amendment introduces a new chapter to the Accounting Act, implementing the provisions of the CSRD Directive (2022/2464) on Sustainability Reporting. Its purpose is to require a larger group of enterprises to disclose information about their impact on environmental, social, and governance (ESG) matters.

Covered entities:

• All large entities,
• Parent entities of large capital groups,
• Small and medium-sized entities listed on regulated markets (excluding micro entities),
• Subsidiaries and branches in EU member states fulfilling determined terms and conditions on size with office in EU member states, whose ultimate parent or standalone entity is subject to regulations of a third non EU country but generates net sales revenue exceeding EUR 150 million within the EU.

Implementation timeline

The provisions of the CSRD Directive define three groups of enterprises that will be subject to reporting obligations at different times:

• 2024 reports: Companies already subject to the Non-Financial Reporting Directive (NFRD).
• 2025 reports: Large enterprises meeting at least two of the following criteria:
  • total assets of EUR 25 million,
  • net sales revenues of EUR 50 million,
  • the average annual employment is at least 250 employees.
• 2026 reports: The obligation will apply to small and medium-sized enterprises listed on the stock exchange that meet specific size criteria, as well as small and non-complex credit institutions and dependent insurance undertakings.

The first ESG reports will have to be prepared for the fiscal year 2024, and mandatory assurance by auditors will become the standard. All reports will be prepared in accordance with uniform European standards, ensuring their consistency and reliability. This information will be included in a separate section of the management report, available in electronic form.

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Summary

The amendment to the Polish Accounting Act, which will come into effect in 2025, introduces a range of significant changes aimed at simplifying accounting obligations for businesses and aligning regulations with EU directives. Key changes include raising the revenue thresholds that mandate the maintenance of full accounting books and expanding ESG reporting obligations, introducing sustainability reporting requirements for many enterprises.

With higher revenue thresholds, smaller businesses in Poland will be able to use simplified accounting methods for longer, reducing their administrative burden. Similarly, raising the thresholds for financial statement audits by certified auditors will help lower costs for smaller economic entities.

All these changes are designed to enhance data transparency, simplify business operations, and ensure compliance with EU requirements.

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If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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