IT accounting, or IT accounting, is a separate accounting department for services provided in this field to IT companies or IT specialists.

In addition to IT companies, typically larger entities operating under the Commercial Companies Code, a common form of IT services provision involves services provided directly by IT specialists to larger entities (IT companies) under B2B agreements.

In this case, IT specialists are entrepreneurs running their own businesses.

In the field of IT-related accounting services, accounting and legal issues also play a significant role in IT accounting, and these should be kept in mind. When concluding a B2B agreement for IT services, it is important to ensure that the IT services agreement precisely defines the scope of IT services provided and precisely defines the terms of remuneration. If the contract stipulates payment of remuneration after acceptance of the service or the preparation of an acceptance report, it should be taken into account that in the case of unreliable Clients (the entity for which the services are provided in such a case), the quality of the IT services provided may be questioned and a refusal or delay in accepting them or preparing an acceptance report may occur. It is also important to remember the duration of the contract and, if the contract is concluded for a fixed term, the possibility or impossibility of early termination, and if so, in what circumstances. It is also important to note whether the contract provides for contractual penalties in the event of non-performance or poor performance of the IT services contract. Ideally, the contract should not provide for such penalties, and if there is no other option, the provisions regarding contractual penalties should be very precisely worded, leaving no room for interpretation. It is also important to note whether the IT services contract provides for consequences in the event of delays or delays in contract performance. This wording is important because delays apply to both culpable and non-culpable causes, whereas delays apply solely to culpable causes.

Conducting IT business in the form of B2B contracts may involve issuing VAT invoices to the client. In such a case, VAT registration with the Tax Office is mandatory. After exceeding PLN 200,000, VAT registration is mandatory (VAT form R).

When starting a business providing IT services, it’s important to determine both the estimated revenue and related costs. This is crucial for IT accounting. In the case of low costs (few cost documents, low value), it’s worth considering flat-rate taxation (a flat rate on recorded revenue), most commonly at 12% for IT services. For IT services, special attention should be paid to the correct definition of the PKWID codes, which determine the tax rate. Therefore, it’s important to carefully familiarize yourself with the PKWID codes related to services provided in the IT industry and the corresponding tax rates. For “larger costs,” you should consider either taxation according to the tax scale or a flat tax. IT professionals have no trouble “calculating,” so they can easily handle this, and with the help of an accountant, they can certainly choose the most optimal taxation method for their needs. Running an IT business, or providing IT services, also requires filing a tax return with the Social Insurance Institution (ZUS). In such cases, it’s worth taking advantage of the so-called start-up tax relief or, later on, the so-called “small ZUS” tax relief.

IT activities performed by IT specialists are considered service activities, so it’s important to remember to register for VAT (as indicated above). In the case of providing IT services to individuals who are not entrepreneurs (not conducting business activity), it’s important to maintain a cash register after exceeding PLN 20,000 in turnover. The VAT rate for IT services is 23%. When conducting IT activities, regardless of the form of taxation, it’s important to remember that many expenses related to this activity can be recognized as expenses, including a vehicle and its operating costs necessary to provide the services, office equipment, computers, and other IT equipment. Such expenses up to PLN 10,000 net can be recognized as a one-time expense; for higher expenses, depreciation of fixed assets can be applied (in such a case, depreciation will be considered an expense, or more precisely, depreciation write-offs). As you can see, before launching a business providing IT services, many issues related to this activity must be considered and analyzed from an accounting, IT accounting, and tax perspective. These issues will determine the tax costs associated with it and, ultimately, the financial result of such a business.

As PRWT Księgowość i Obsługa Biznesu sp. z o.o., we specialize in IT accounting and provide accounting services for the IT industry, including both IT companies (commercial law companies) and individuals running individual businesses under B2B agreements. Therefore, we are intimately familiar with the specific accounting requirements related to these services.

If you are interested in the services of PRWT Księgowość i Obsługa Biznesu sp. z o.o., please contact us.