December 7, 2022
Poland issues draft regulations on mandatory electronic invoicing
Poland will introduce obligatory structured e-invoicing and the KSeF system (National e-Invoicing System) effective from 1 January 2024.
The changes are extensive and include mandatory e-invoicing for foreign entities with a value-added tax (VAT) fixed establishment in Poland.
The rules apply to all activities subject to VAT in Poland, including supplies between businesses (B2B), supplies made to public authorities (B2G), and supplies to consumers (B2C).
Penalties will apply from 1 July 2024 for failures to comply with the new obligations.
On 1 December 2022, the Polish Government issued a long-awaited draft of the Polish regulations regarding obligatory structured e-invoicing and the KSeF system (National e-Invoicing System).
The scope of changes is extensive, and they will have an impact on foreign entities that have a fixed establishment in Poland for VAT purposes. The start date for the changes has been confirmed as 1 January 2024.
In general, obligatory e-invoicing will apply to activities that currently require documentation with an invoice issued in accordance with the Polish VAT Act. However, other activities may be included, such as services subject to VAT exemption. Therefore, it is primarily about activities subject to VAT in Poland, including domestic deliveries of goods and the provision of services between entrepreneurs (B2B), public authorities (B2G), as well as to consumers (B2C).
Below is a summary of the key issues introduced or clarified in the draft regulations:
- 1 January 2024 is the date of entry into force of mandatory e-invoicing.
- E-invoicing also will be mandatory for foreign entities with and FE (fixed place of business for VAT purposes) in Poland.
- Severe fines for not issuing e-invoices or for issuing them in an inappropriate form are provided:
- A fine up to 100% of the VAT amount shown on the invoice or a fine up to 18.7% of the total amount due on the invoice in the case of an invoice without the VAT amount may be imposed if the taxpayer: (i) fails to issue an invoice using the KSeF despite such an obligation; (ii) issues an invoice in electronic form not in accordance with the template provided; or (iii) fails to send it to the KSeF on time (in the case of invoices issued during a KSeF temporary breakdown, the taxpayer is obliged to deliver to KSeF within seven days after the end of the failure).
- Penalties are foreseen for each incorrectly issued and/or delivered invoice and the amount thereof is no less than PLN1,000 (for (i) and (ii) above) or PLN500 (see above).
- Penalties are to apply starting from 1 July 2024.
- There is an obligation to mark e-invoices being provided outside of the KSeF with a special verification code (QR), enabling verification of the data and the e-invoice authenticity (relevant for invoices being provided for recipients not covered by e-invoicing obligations, e.g., B2C invoices or invoices being issued for foreign entities).
- There is a requirement to agree on the method of making the invoice available to entities not covered by the e-invoicing obligation.
- The possibility of issuing invoices by using cash registers is revoked from 1 January 2025.
- A new type of document is proposed (the “correcting invoice proposal") in the KSeF for purchasers intending to obtain an amended invoice from their vendors.
- Additional information is added to the so-called White List, indicating whether a given entity is obliged to issue e-invoices.
- The draft regulations clarify rules for correcting invoices (issued in the KSeF and outside the KSeF).
- An obligation to indicate on the settlement invoice the KSeF numbers of advance invoices issued in the KSeF (and advance invoice numbers - in relation to invoices issued outside the KSeF) is introduced.
- The regulations include measures for automating and optimizing the VAT settlement of in minus correcting invoices.
- A collective identifier must be assigned to at least two invoices issued to one recipient.
- An additional field in the bank transfer order for the number identifying the e-invoice in the KSeF is introduced.
- In addition, the obligation to issue e-invoices is extended to taxpayers using the so-called subjective exemption (small entrepreneurs), those supplying goods and services for B2C customers and those selling services exempt from VAT.
- The procedure in case of inability to issue invoices using the KSeF is regulated.
- Integration of the existing electronic invoicing system for B2G transactions (PEF) with the KSeF.
- The rules for issuing VAT RR invoices (applicable to the special procedure for entities buying crops from farmers) and correcting VAT RR invoices on an optional basis is regulated.
- There is no e-invoicing obligation for VAT taxpayers subject to special procedures (benefiting from a non-European Union scheme for certain services, a specific scheme for the provision of international occasional road passenger services, a specific scheme for distance selling of imported goods).
For additional information with respect to this Alert, please contact the following:
EY Doradztwo Podatkowe Krupa sp. k.