How to Account for VAT and CIT on Lease Deposit Payments

• Leasing of property under a lease agreement is considered a taxable service under VAT.
• Company Y signed a lease agreement for undeveloped land with Company X on April 3, 2025.
• The lease is for three years from June 1, 2025, to May 31, 2028.
• Annual rent is 10,000 PLN net, with a deposit of 5,000 PLN due by the end of April 2025.
• Company Y received the deposit on April 10, 2025, but has not received the rent for the period from June 1, 2025, to May 31, 2026.
• No invoices have been issued for the deposit or the first year’s rent.
• There are no connections between Company Y and Company X as per VAT law.
• The company’s tax year is the calendar year, with a CIT rate of 19 percent.
• VAT and CIT advances are settled monthly on a general basis.
• VAT applies to the supply of goods and services within the country.

Source: podatki.gazetaprawna.pl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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