Effective July 1, 2024 the use of e-Invoices will become mandatory in Poland. This is a significant step towards digitalization and automation and poses a major challenge for the affected companies. It is therefore important to cope with the issue at an early stage.
This text outlines the main questions regarding e-Invoicing, gives a global overview and highlights the advantages of e-Invoicing.
Is e-Invoicing mandatory in Poland?
On January 1, 2022, the national system for electronic invoices KSeF was introduced — initially as an optional applicable solution — to enable data exchange, issuance, receipt and storage of structured invoices.
The issuance of electronic invoices using KSeF in the B2B sector will largely become mandatory from July 1, 2024.
Poland is thus another EU member state that has decided to switch from the so-called post-audit model to the clearance model for electronic invoice processing.
Which (main other) countries are using e-Invoicing?
E-Invoicing has already been implemented in Italy in 2019. This allows the Italian Revenue Agency to automatically collect details of all e-Invoices — before they are even sent to customers — enabling them to accurately calculate the tax due on payment of each invoice.
Poland is one of the first EU countries to introduce mandatory e-Invoicing, enabling its tax authorities to enhance their ability to verify the correctness of data through various checks and reconciliations.
Below you see a timeline of the planned implementation of e-Invoices as of October 2023:
Note: The regulations and the extent regarding e-Invoices vary from country to country.
These developments highlight the global shift towards digitalization and automation in tax reporting and invoicing, reflecting the evolving landscape of financial regulations and compliance.
What is the KSeF (Krajowy System e-Faktur) platform in Poland?
The National System for Electronic Invoices KSeF (Krajowy System e-Faktur) is a data exchange system for issuing, receiving and storing structured electronic invoices in Poland.
The electronic invoice requires an XML format in accordance with the logical structure of electronic invoices (FA_VAT). An e-Invoice submitted to the KSEF Portal undergoes verification process for semantic correctness, once the e-Invoice is successfully submitted the KSEF system provides a time stamp and assigns a unique identification number known as the KSEF ID. In case of any incorrectness (e.g. wrong file structure, unauthorized person) the invoice will be rejected by KSEF system (no KSEF ID is generated) and the taxpayer will have to correct the invoice and upload again.
Once the invoice is successfully submitted, the issuer receives an official receipt, referred to as UPO (Uniformed Electronic Confirmation). Importantly, there is no need for the issuer to send the KSEF ID to the receiver, as the invoice is readily accessible in the KSEF Portal for the buyer’s convenience.
The KSEF ID is especially crucial in case of an incorrect invoice as the tax payer cannot accept or reject an invoice. In the instance of an incorrect invoice the issuer will have to issue a correction invoice.
It is possible to upload and download e-Invoices in batches or one by one and they are stored for a period of 10 years within the KSEF portal which ensures a comprehensive record of financial transactions.
What are the rules for invoicing in Poland?
All businesses established in Poland, including SMEs, must adopt the KSeF system.
Along with the amended Act, taxpayers will have to use the KSeF system to issue and receive e-Invoices as of July 2024. For VAT-exempt businesses, the system will become mandatory from January 2025.
Who is eligible for Poland e-Invoice mandate? Who will be subject to Polish e-Invoicing?
The obligation to issue e-Invoices via National e-Invoicing System will be imposed on taxpayers performing activities subject to the invoicing obligation under Polish VAT regulations, having their seat or fixed base in the territory of Poland.
Taxpayers registered for OSS/IOSS purposes in Poland will be obliged to comply with Polish invoicing regulations. Consequently, taxpayers registered under OSS/IOSS in another Member State will be exempt from this obligation.
Mandatory e-Invoicing is to cover all the activities subject to domestic VAT, including:
- domestic supplies of goods and provisions of services between companies (B2B),
- supplies and provisions to public authorities (B2G),
- supplies and provisions to consumers (B2C). In this case, the principle that the invoice is issued at the buyer’s/service recipient’s request made within 3 months from the end of the month in which the given activity was performed is to remain unchanged.
What are the advantages of the Poland e-Invoice?
Structured e-Invoicing marks a notable transformation, but with promising benefits for businesses. By converting the invoicing process into a digital format, companies can optimise their accounting methods, ultimately reducing time consumption and directing resources towards other tasks and functions. Expertly implemented e-Invoicing has the capability to reduces instances of errors and the subsequent need for adjustments and corrections, while speeding up payment cycles and improving cash flow.