The Poland government plans to implement e-invoicing from 1st January 2024 and issued the draft regulations accordingly. However, the Polish Ministry of Finance postponed the e-invoicing implementation date to 1st July 2024.
The e-invoicing initiative significantly changes business operations. The e-invoicing implementation is complicated, time-consuming, and involves substantial financial investment. One can observe the same in the case of large companies that already started the implementation process.
This article explains all about e-invoicing in Poland including, what is it, the latest updates, challenges in implementation, and how to prepare for it.
Businesses in Poland shall issue and receive e-invoices in real-time using a standardized XSD format. Further, they should do e-invoicing through the National System of e-invoices (a governmental clearing system), called Krajowy System e-Faktur, or KSeF.
KSeF validates each invoice from a technical perspective. Once the invoice is validated successfully, the KSeF portal will assign a unique KSeF ID number for that e-invoice and makes it available for the purchaser. Then the purchaser can download the invoice for further use.
However, KSeF rejects the invoice if there is any technical mistake or when unauthorized entities have issued e-invoices. It is to be noted that tax authorities can access all invoices whether it is successfully validated or rejected.
Poland tax authorities are already implementing e-invoicing voluntarily from 1st January 2022. However, only a few businesses have switched to standardized e-invoices, even though the authorities announced incentives. The major benefit of e-invoicing is getting a VAT refund within 40 days instead of 60 days.
The Ministry of Finance published the first draft regulation on mandatory e-invoicing in December 2022 and submitted the same for public consultation. Businesses and tax advisers raised many comments regarding the technical aspects and scope of e-invoicing.
The ministerial website shows that a lot of the submitted comments were accepted. Apart from the postponement of implementation, the tax authorities announced the following charges:
The Ministry of Finance plans to retain the scope of e-invoicing in the mandatory KSeF, as mentioned in the draft provisions. Accordingly, the e-invoicing shall cover entities established in Poland and entities operating in Poland through a fixed establishment such as a branch.
So, it can be concluded that the foreign companies registered for VAT purposes in Poland and do not have a fixed establishment won’t fall under mandatory e-invoicing. Accordingly, they can still issue and receive standard invoices electronically, such as a PDF or even on paper.
However, the fixed establishment is controversial in the EU, as reflected in many judgments of the Court of Justice of the EU and the Polish administrative courts and tax-binding rulings issued by the tax administration.
Hence, the Ministry of Finance plans to issue explanatory notes specifically on the fixed establishment criteria to help foreign companies, and their Polish contractors determine whether they have a fixed establishment in Poland.
Below are a few more challenges in Poland e-invoicing:
The new e-invoicing system is a revolution in invoicing in Poland. The implementation of KSeF is a complex and time-consuming process.
KSeF is not just adopting the technical aspects; first, a business must understand how the KSeF impacts them and what changes they must make to internal procedures, business processes, contracts, regulations, etc.
Hence, businesses shall plan early and comprehensively to make changes properly for the smooth implementation of e-invoicing.