Polish leap in digitisation - mandatory e-invoicing coming soon
VAT and indirect tax
Polish leap in digitisation – mandatory e-invoicing coming soon
Sat 10 Jun 2023
Originally, mandatory e-invoicing was supposed to come into effect as early as 2023, but due to the complexity of the application of e-invoicing procedures and objections of entrepreneurs, the deadline was postponed until July 2024. Nevertheless, it should be kept in mind that this is not a distant prospect.
As of 1 July 2024, the issuance of structured invoices (so-called “e-invoices”) via a national government platform, the National e-Invoice System (abbreviated as “KSeF”), is to become mandatory for a significant part of Polish VAT taxpayers. This means that the “ordinary” VAT invoices issued so far in relations with contractors will have to be replaced by e-invoices in digital format.
Who and what will be covered by mandatory e-invoicing?
The obligation to issue e-invoices will, as a rule, concern active VAT taxpayers with a registered office in the territory of Poland, and foreign entities registered as Polish VAT active taxpayers with a permanent place of business in Poland. Obliged to e-invoicing will be also VAT-exempt taxpayers but as of 1 January 2025.
As a rule, e-invoices will be mandatory for activities subject to VAT in Poland, i.e. domestic deliveries of goods and provision of services between businesses (B2B).
Importantly, it is also assumed that e-invoices will have to be issued for transactions taxed outside the territory of Poland – transactions with foreign entities (e.g. ICS, export of goods, export of services). However, it should be noted at the same time that for these types of transactions the taxpayers will need to agree with the foreign counterparty on the manner of receipt of the e-invoice by him (e.g. PDF invoice / paper invoice). What is also important, e-invoicing should not apply to consumer sales (B2C transactions).
The planned structure of e-invoices can be found at the following link: https://ksef.mf.gov.pl/.
What exactly is an “e-invoice”?
A structured invoice is an electronic invoice in xml format, issued using KSeF and having a unique number assigned also by KSeF. It should have a data scope that complies with the e-invoice logical structure (xds form), as announced by the Polish Ministry of Finance. Importantly, e-invoice should not mean an invoice in pdf form or a scan of a paper invoice, as such documents will not be able to be reprocessed by the KSeF system.
The e-invoice schema consists of several hundred items, from which you must select the data to be completed for each type of invoice. The items are divided into 3 categories, i.e. obligatory items (directly required by the VAT regulations in Poland), voluntary items (required in some cases by the Polish VAT regulations) and voluntary data (not required by VAT regulations, but some of this type of data is currently shown on invoices by VAT taxpayers to facilitate settlement of transactions, e.g. CN codes). The range of data to be included in the e-invoice will therefore be very wide.
When to start preparing for e-invoicing?
Although there is still a year before the implementation of mandatory e-invoicing, this does not mean that preparations should be deferred to future.
Taxpayers should prepare for the process by appointing in advance the person(s) responsible for implementing e-invoicing process in the company. Entrepreneurs should also determine, to the extent possible, the type of invoices issued and the available and missing data to match the scope of the e-invoice schema as well as focus on internal processes related to the circulation of sales and purchase invoices. In addition, it seems important to adjust internal rules/policies as well as agreements with contractors because potentially other types of internal and commercial documents, may need to be modified.
Accordingly, it is crucial for the correct and optimal implementation of KSeF in a company to analyze the content of invoices and business processes in advance in terms of the planned change in VAT regulations. It is also important to receive authorization to use KSeF and to select the appropriate software for generating and sending e-invoices.
The introduction of the obligation to use e-invoices will be a huge change for the billing, which will affect not only the format and method of transmitting invoices in business-to-business relations, but will also force VAT payers to reorganize their existing business processes. Thus, It is worth starting the implementation of the KSeF system shortly, because the transition to structured invoices can involve an implementation process of up to several months. Whereby, the larger the company and the more complex the invoicing model, the longer and more difficult the process will be.
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