New law on electronic invoices in Poland - KSEF

New law on electronic invoices in Poland – KSEF

General information

Paper-based document management is a relic that should be actively discarded. Poland is following this path. Until now, the rejection of innovations has been blamed on the high costs that would be required for the complete reorientation of business to e-fakturę. In June 2022, the Polish Ministry of Finance decided to make a “radical change” – from 2024 electronic invoices will be mandatory in Poland.

The President of Poland signed the Act of 16 June 2023 amending the Value Added Tax Act. The obligation to issue electronic invoices will come into force from 1 July 2024 for all VAT payers and from 1 January 2025 for VAT-exempt companies.

Progress Holding will soon offer you a new document management model and software.

What is KSEF

KSEF (National System of Electronic Invoices) is a national system in Poland that allows the creation, processing and exchange of electronic invoices. This system requires taxpayers to use electronic invoices instead of paper or other formats. In the KSEF, electronic invoices are presented in XML format corresponding to the logical structure of a specific FA(1) electronic document template published in the Central Repository of Electronic Document Templates (CRWDE) on the ePUAP platform. The aim of the implementation of the KSEF is to simplify the invoice issuing and processing process and to improve the electronic data exchange between companies and public authorities. In addition, the introduction of the e-invoicing system will help minimise the risks of illegal VAT refunds by dishonest businessmen. Electronic invoices are more transparent and more difficult to falsify, which allows for more thorough control and prevention of economic fraud. The Polish Ministry of Finance takes control of the electronic invoice system.

Who falls under the requirements to use the KSEF:

• Entrepreneurs registered as active VAT payers, all LLCs and sole proprietorships
• Entrepreneurs exempted from paying VAT from 01.01.2025
• Taxpayers identified in Poland for the EU special procedure OSS, having a Polish taxpayer identification number NIP.
• Foreign companies which are VAT payers

Stages of implementation of the KSEF

• A pilot project with taxpayers in Poland is being conducted from October to December 2021. The available KSEF test environment can still be used to set up IT systems.
• From 1 January 2022, the National Electronic Accounts System is introduced as a voluntary solution. From now on, it is possible to issue structured invoices in the National e-Invoicing System (KSEF).
• From 1 January 2024, the Council of the European Union agreed to make electronic invoicing mandatory in Poland.

IMPORTANT: from 01.07.2024 KSeF will become mandatory and only the document that has been entered into KSeF and received a number from KSEF for B2B settlements will become an official invoice. Without that, it is not a cf.  All documents will follow the same standard.

Main provisions

The introduction of a unified electronic invoice standard (UEF) will optimise invoicing, workflow and billing systems for businesses. It will simplify the documentation of transactions, speed up and automate the issuing, processing and archiving of invoices. Faster processing of documents will result in lower costs. According to the main provisions of the act, KSEF will become mandatory from 1 July 2024. However, for small and medium-sized enterprises (SMEs) that do not pay VAT, the introduction concerns from 1 January 2025. They will be given an additional six months to prepare for the use of the KSEF. Current forms of trade documentation such as paper invoices and electronic invoices already exist. However, with the implementation of the CSEF, the electronic invoice will become the only form of sales or purchase documentation except for overseas sf . In addition, a fiscal receipt with a taxpayer identification number will be recognised as a simplified invoice until 31 December 2024.

It is important to note that consumer bills (B2C) will not be covered by the KSEF. Also, tickets that act as an invoice are excluded from the scope of the KSEF. Invoices issued under OSS and IOSS procedures will also be excluded from the KSEF. For the seller, the date on which the invoice is issued will be the date on which the invoice is sent to the KSEF. The date of receipt of the invoice – for the buyer – will be the date of assignment of the KCEF number In bank transfers, taxpayers must indicate the KSEF number of the invoice. In case of system failure or offline, taxpayers will be allowed to issue corrective invoices. In addition, clarifications will be developed on billing dates and other important aspects in case of failures or offline operation. The act will also liberalise penalties and make them applicable only from 1 January 2025. In addition, corrective comments within and outside of the KSEF will be addressed.

Tax benefits from the implementation of the CSEF system

The Polish Ministry of Finance promises tax benefits to those who use the system.

• A taxpayer using the CSEF who applies for a refund of input VAT will receive this refund in a shorter period of time. The maximum basic refund period is reduced from 60 days to 40 days, which will have a positive impact on financial liquidity, especially for SMEs.
• KSEF means simpler and quicker rectification of accounts.
• Taxpayers will not have to issue duplicate invoices, because electronic invoices in KSeF will not be lost or destroyed, they will always be available to the issuer and recipient of the invoice.
• The taxpayer issuing invoices in KCEF will not have to send the structure of the Standardised Control File for Invoices (JPK_FA) upon request of the tax authorities.

Key business benefits

The KSEF system in Poland is based on the experience of Italian invoice developments. Its aim is to simplify the process of preparation and transmission of electronic invoices by taxpayers.

The advantages of the KSEF system include:

• exemption from the need to work with traditional invoices,
• shorter VAT refund periods
• greater security and standardisation of processes, as well as automation and reduction of the amount of data transferred to the Tax Service
• the buyer can be sure that the invoice is issued by the seller. In addition, the issuer of the invoice is sure that the recipient has received the invoice
• increased speed of data exchange in contacts between counterparties – the issued invoice will be provided to the recipient by the administration almost in real-time mode
• in case of using ProgressHolding solution, you don’t need to download any Polish sf for the accounting department.
• structured unified invoice template will allow you to automate accounting processes, introduction of automation into the accounting process will reduce the number of errors when entering data manually
• The service of storing and archiving e-invoices for a period of 10 years is provided by the administration, which offers the possibility of significant savings due to the absence of the obligation to store these documents

However, the KSEF system will not be able to provide any analytics, so businesses in Poland will have to buy software solutions.

This is an important topic, so for the convenience of our old and new clients, we plan to cover it in our next articles. We will work with you to understand and explain in more detail who falls under the requirements of this system, explain the general procedure, provide our clients with step-by-step instructions on how to work in this system, and train our clients on how to use the system. Follow the news on our website https://progressholding.pl/.

Feedback is always important to us! So, if you already have questions on this topic, send them to our address – office@progressholding.pl, we will certainly take them into account in the next reviews and try to provide as much information as possible in response to your requests.