Currently, entrepreneurs settle their accounts according to the so-called accrual method. This means that they must pay income tax after they have received the income due, i.e. even if they have not yet received payment from their contractor. However, they settle costs on the basis of an invoice, even if they have not yet paid it. The government’s draft tax changes assume that from next year entrepreneurs will be able to use the cash settlement method. If the taxpayer chooses this, he will only be able to declare income when he receives payment from the contractor. However, he will take the cost into account when he pays for the goods or services purchased himself. The cash method therefore means that the tax will be settled later – only when the accounts receivable have been settled, but at the latest after two years or when the company is liquidated.
