What is KSeF?
KSeF (National Electronic Invoicing System) is a mandatory nationwide electronic IT system for invoicing in Poland, developed by the Ministry of Finance. It represents an electronic form of invoicing, transmission, and storage of invoices. The introduction of KSeF aims to enforce the mandatory implementation of electronic invoicing processes and electronic data exchange between companies and government entities.
What is changing?
From this moment forward, only the document generated in the KSeF system and assigned a unique number will be considered an invoice.
In 2024, only B2B invoices will be included in KSeF. B2C invoices will not be included in KSeF in 2024. All invoices for foreign counterparts must also be in the XML format of KSeF. The Ministry of Finance of Poland takes control over the electronic invoicing system.
Who falls under the requirements of using KSeF?
- Starting from July 1, 2024, all legal entities based in Poland, as well as foreign legal entities with a permanent establishment for VAT purposes in Poland, will be obligated to document B2B transactions using electronic invoices, according to Polish VAT rules.
- Until January 1, 2025, entities exempt from VAT (both subjectively and objectively) will not be required to issue B2B invoices using KSeF. However, it is worth noting that these VAT-exempt companies will be obligated to collect invoices issued to them through KSeF (without the need to express consent for such invoice format – this acceptance will be required from all entities only until July 1, 2024).
- Taxpayers identified in Poland for the special EU OSS procedure, having a Polish taxpayer identification number (NIP).
Thus, registered VAT companies without a permanent establishment for VAT purposes in Poland will not be required to use KSeF. This will also not apply to foreign enterprises without VAT registration in Poland. At the moment, the obligation to use electronic invoices issued to consumers (i.e., B2C) has been canceled. Taxpayers will have to issue them in the current form, requiring the appropriate adaptation of processes in this area to account for different methods of invoicing – different for domestic entrepreneur recipients, different for consumers, and separate for foreign B2B transactions (e.g., export, intra-Community supply).
Stages of KSeF implementation
Stages of KSeF implementation
- Currently, and until July 1, 2023, KSeF is introduced as a voluntary solution. Henceforth, structured invoices can be issued in the National Electronic Invoicing System (KSeF).
- From July 1, 2024, the system becomes mandatory for large commercial enterprises.
- From January 1, 2025, the system becomes mandatory for small and medium-sized enterprises enjoying VAT exemption.
IMPORTANT! From mid-2024, the use of the KSeF system will become mandatory for all entrepreneurs. Therefore, we strongly recommend our existing clients, as well as newly joined ones, to start transitioning to this system now. This is necessary to avoid disruption to your business operations.
Electronic Invoices
The electronic invoicing system is based on sending invoices electronically between the seller and the buyer, rather than the traditional method of sending paper invoices. Electronic invoices are generated by specialized software that complies with specific technical and legal requirements. Invoices are presented in XML format, corresponding to the logical structure of a specific electronic document template FA(1), published in the Central Repository of Electronic Document Templates (CRWDE) on the ePUAP platform. Information is recorded in the invoice according to an accepted standard/criteria, defining the data categories that must be included in the invoice (e.g., information about the seller and buyer, subject of sale, amount, sale date, number).
After entering data into the system, each invoice receives a unique identification number and is then checked for compliance with the template of a structured invoice. In essence, invoices will have two numbers, one from the company and one from KSeF (National Electronic Invoicing System).
IMPORTANT! A structured invoice will be considered issued and delivered only when it is assigned an identification number by KSeF.
Technical Infrastructure
Access to the National Electronic Invoicing System will be possible after creating an individual account, which can be managed from a computer or mobile device. The system includes an authentication mechanism that verifies the identity of the entity based on qualified sources, such as qualified certificates (electronic signature, electronic seal, or trusted signature), as well as a trusted profile.
The system is already available for testing. The Ministry of Finance has provided a free tool for the KSeF Test Zone. Thanks to this, interested parties (such as software manufacturers for companies) can adapt their IT systems for KSeF implementation. The KSeF Test Zone allows, among other things:
- Sending and receiving e-invoices according to the template of logical structure.
- Transmitting e-invoices to KSeF via API.
- Using self-created signatures and seals.
- Viewing, providing, and revoking authorizations in KSeF.
Another way to familiarize yourself with the system is the KSeF Taxpayer Application. This is a test program available after creating an account on the Ministry of Finance website. After logging in, the user can freely work with KSeF, provide access to third parties, manage tokens and permissions, and most importantly, issue, receive, and share electronic invoices in KSeF. This is an ideal solution for any entrepreneur who has not yet had contact with the government platform.
To access this application, follow these steps:
- Go to the Ministry of Finance website.
- Find the “Company Identifier” field, enter the NIP with which you want to authenticate, then click “Authenticate.”
- Authentication can be done using a trusted profile or a qualified certificate. You will find detailed instructions on the GOV website on how to do this.
If you are a company that issues multiple e-invoices per day, you will need to purchase the necessary application to process, upload, and work with this large volume of invoices (batch processing). If you choose commercial financial and accounting programs, you will need to check whether they provide the ability to verify issued documents, correct them, and allow for receiving invoices issued by counterparties. Such applications have already appeared in Poland. The applications have a range of convenient settings. To create and send documents, you need to enter relevant information about the seller and buyer (description of goods or services, quantity, net price, specify the payment method, NIP, etc.). Next, the application generates documents, and through a special gateway, they are sent to KSeF, where they are assigned an identification number, and the documents become issued invoices.
The Ministry of Finance program does not provide all the necessary functionality. Therefore, Progress Holding has prepared a simple and clear instruction for working with and using the SOLEDO application, which provides the required functionality. You can request this instruction by contacting: office@progressholding.pl
How does KSeF function in Poland?
KSeF is the National Electronic Invoice System in Poland, which allows businesses to centrally manage financial documents. This system is designed to simplify and automate the process of creating, sending, and storing all invoices. Particularly valuable is the fact that KSeF connects to external accounting and financial systems, ensuring high data processing efficiency and reducing the time spent on accounting operations.
The second important function of KSeF is to improve the transparency and accessibility of information. All invoices are stored in one place, which significantly facilitates access to them for both business units and tax authorities. This not only speeds up the approval and verification processes but also promotes more efficient tax report management.
Advantages of Using KSeF
Using KSeF in business brings numerous benefits. First, it significantly reduces the time needed for processing invoices and tax returns. Second, the system minimizes the likelihood of errors in invoices, which is a common issue in traditional accounting processes. Additionally, due to data centralization, companies gain the ability to better control their financial flows and conduct data analysis for strategic planning.
An additional advantage is the increased level of data security. KSeF uses modern encryption technologies and secure information storage, making the system a reliable tool for handling confidential information. All these factors make KSeF not only a convenient but also a safe solution for businesses of various sizes.
How to Join KSeF?
To integrate with KSeF, businesses need to complete a series of technical and administrative steps. The first step is to register in the system using a qualified electronic signature or a trusted profile. Next, the accounting software must be configured to work with KSeF, which may require technical support or specialist consultations.
After completing the preparatory work, companies begin to gradually convert their documentation to electronic form, starting with the most frequently used types of documents. This allows businesses to adapt to the new system progressively, minimizing disruptions. Connecting to KSeF also opens up additional opportunities for automation and optimization of internal processes, which is a significant advantage for any enterprise.
What Does the Invoicing Process in Poland Look Like?
The invoicing process in Poland through KSeF starts with the creation of an invoice in accounting software that is compatible with KSeF. After entering all the necessary data, the invoice is generated in the appropriate format and sent to the system. This happens in real-time, and the business receives confirmation of the document’s receipt almost instantly.
It is particularly convenient that the system allows for the accounting of not only standard but also international transactions, ensuring compliance with all necessary regulations and standards. Thus, KSeF not only simplifies the invoicing process but also promotes deeper integration of Polish businesses into international economic processes.
The Role of Accounting Firms in the KSeF Era
In the new economic environment, accounting firms become key partners for businesses in integrating with KSeF. They provide the necessary support in adapting and configuring systems, training staff, and resolving technical issues. Accounting firms also help develop internal procedures to ensure compliance with the new requirements, which is particularly important during the transition period.
Accountants work actively to ensure that their clients can not only use KSeF effectively for their current needs but also maximize the benefits of the system for strategic planning and analysis. This includes optimizing tax burdens, improving cash flow management, and enhancing overall business efficiency.
Prospects for Using KSeF
With the expected mandatory implementation of KSeF in Poland by 2026, all companies will need to adapt to the new system. This will require not only technical changes in accounting approaches but also cultural adaptation of personnel. Entrepreneurs and accountants need to understand the significance of transitioning to digital technologies, which can improve work efficiency and reduce the number of errors in financial documentation.
Moreover, the state and businesses will have the opportunity to better control tax processes and operations, contributing to increased transparency of economic activities and reducing the level of corruption. Connecting to KSeF also promises companies certain tax benefits and the simplification of many procedures, making the system attractive even before its mandatory implementation.
Implementation of KSeF and Its Impact on Small and Medium Enterprises
For small and medium-sized enterprises (SMEs) in Poland, KSeF represents a significant innovation that can both simplify and complicate certain aspects of their operations. On one hand, this system allows for the automation of the invoicing process, leading to reduced costs for accounting services and less time spent on accounting procedures. On the other hand, the need for technical preparation and potential initial investments in software upgrades can be a challenge for businesses with limited resources.
It is important to note that the government offers various forms of support for SMEs during the transition to KSeF. This includes training programs, financial incentives, and technical support, making the transition smoother and more accessible. Such measures help small and medium-sized businesses remain competitive and adapt to the new realities of the digital economy.
What is an Invoice and How Will It Change with KSeF?
What is an invoice? It is an official document that confirms a commercial transaction between two parties and contains all the details of that transaction. With the introduction of KSeF, the process of creating and processing invoices will undergo significant changes. The electronic format will simplify and expedite the exchange of documents, eliminating the need for physical paper transfers.
This will also improve the control over the legality of transactions and the accuracy of data, as each invoice will be automatically checked by the system for compliance with established requirements. Moreover, the number of errors will decrease due to the reduction of the human factor, and businesses will be able to better manage their finances thanks to timely access to up-to-date data.