The Act introducing mandatory electronic invoicing using the National e-Invoicing System (KSeF) from 1 July 2024 has already been published in the “Journal of Laws”.
What is the KSeF? In general, it is a system that will enable structured invoices to be issued and made available. In other words, it is a mechanism by which taxpayers will be able to issue and receive invoices documenting transactions carried out by entities established in our country and those with tax registration here.
From when will KSeF be mandatory? The test and production phases have been available to taxpayers for quite some time. However, the final, i.e. obligatory for the majority of taxpayers, entry into force of these regulations is planned for 1 July 2024. Half a year later (from 1 January 2025), it will also become obligatory for entrepreneurs who are exempt from VAT, both subjectively and objectively.
In view of the huge changes that await entrepreneurs, we present to you our (subjective) summary of the 10 biggest challenges that await taxpayers after the entry into force of the regulations on the National e-Invoicing System.
In our opinion, this is a key aspect, especially as it is not entirely intuitive. With the entry into force of the KSeF, there will be a number of important dates that taxpayers will need to pay particular attention to.
According to the newly introduced Article 106na sec. of the Polish VAT Act, a structured invoice is deemed to have been issued on the date it is sent to KSeF.
Thus, the most important date from the taxpayer’s perspective is the date of sending to KSeF. It is this date that determines the entry into force of the invoice into legal circulation and it is this date that is considered to be the date of issue of the invoice pursuant to the provisions of the Polish VAT Act (i.e. the date that generates the tax obligation in specific situations).
Importantly, it does not have to coincide with the date that the taxpayer will be able to enter in field P1. This field will correspond to the date of issue of the document (as defined in Article 106e sec. 1 point 1 of the Polish VAT Act).
When will there be no coincidence in these dates? This may happen, for example, if KSeF is unavailable in the taxpayer’s system at the time it is generated. By the same token, the date of issue of the invoice in the taxpayer’s system – except when KSeF is offline or the taxpayer records some kind of failure at his premises that does not allow the invoice to be sent to KSeF – will not be of much significance from the perspective of tax liability.
However, that is not all. It is also important to note that the point at which an invoice is issued at KSeF (the date it is sent to KSeF) is, in principle, the same as the date on which such an invoice is received by the purchaser. And this receipt of the invoice is defined as the assignment of the KSeF number. From the buyer’s perspective, it is also important that the receipt of the invoice does not require its acceptance or even technical approval. The assignment of a KSeF number to a sent invoice by the supplier equates to receipt of the invoice by the buyer.
In summary, the taxpayer will encounter several important dates in the KSeF to which he should pay particular attention:
- the date on which the invoice is sent to KSeF – the date considered to be the issue of the invoice. It is relevant from the perspective of specific moments of tax liability;
- the date on which the KSeF number is assigned – the date on which the invoice is received by the purchaser, generally the same as the date on which the invoice is sent to KSeF;
- the date of creation of the invoice (field P1 of the schema) – corresponds to the date of physical issue of the invoice in the taxpayer’s system, and will be important when KSeF is unavailable or the taxpayer encounters problems in uploading invoices to KSeF.
2 Purchase invoices
Another important issue to which we believe attention should be paid is that concerning purchase invoices. Nowadays, as a general rule, in every organisation there is a specific policy for the acceptance of purchase invoices related to the accepted workflow, i.e. acceptance of a given purchase invoice, payment and its posting and tax settlement.
Our practice shows that the acceptance of such invoices is usually done by dedicated emails or by redirecting them to specific individuals. Once KSeF is mandatory, the vast majority of invoices will be received by the company through this system. This situation raises several important issues that need to be addressed within the organisation.
First of all, it should be pointed out that it seems necessary to introduce a new or modified procedure for assigning invoices to individual units. In order to make such assignment possible, it would be necessary, in our opinion, to recommend to contractors to include in certain fields of the structured invoice elements allowing their identification, e.g. by indicating the correct contract or order number.
While this should not seem to cause many problems in the case of direct execution of orders by dedicated staff, it may not be the case when employees are accounting for business trips or when they make individual purchases.
It should be remembered that even with stationary purchases, the expense invoice will not be issued manually, but will be routed through KSeF.
Naturally, as an aside, it should be noted that cash register invoices will still be able to be issued in their current form until 31 December 2024. Until then, the fiscal receipt with TIN will therefore be considered a simplified invoice. In addition, tickets that fulfil the functions of an invoice, motorway toll receipts, but also invoices issued using OSS and IOSS procedures will also be excluded from the KSeF.
In conclusion, it seems inevitable that, especially in the first phase of the KSeF implementation, there will be a pool of invoices left in companies, at the end of the month, that will need to be identified and properly assigned according to a specific bookkeeping account (cost center).
3 Sales invoices
On the other hand, an important aspect, from a revenue point of view this time, will be the issuing of sales invoices.
As we indicated in the introduction, from 1 July 2024, the KSeF will become mandatory for active VAT taxpayers. On the other hand, taxpayers exempt subjectively and subjectively from VAT will be obliged to use it six months later, i.e. as of 1 January 2025. Nevertheless – not all of them.
First of all, it will not be possible to issue invoices in KSeF for consumers (B2C relation). For such persons, it will only be possible to issue an invoice in the standard way – outside KSeF.
But this is not the only exception. According to Article 106gb sec. 4 of the Polish VAT Act, in cases where:
- the place of supply is the territory of a Member State other than the national territory or the territory of a third country, or
- the customer is an entity without a place of business or a fixed establishment in the national territory, or
- the customer is a non-established trader in the territory of the country who has a fixed establishment in the territory of the country, this fixed establishment not being involved in the supply of the goods or services for which the invoice is issued
– the structured invoice is made available to the buyer in a manner agreed with him.
Thus, in the case where our counterparty is a foreign entity, i.e. generally one that does not have a registered office or a fixed place of business for this transaction, the invoice will have to be made available to him in ways other than through KSeF.
In summary, it is necessary to be prepared for the situation that when conducting business activity for various entities, i.e. in addition to sales to Polish taxpayers, also for consumers and foreign entities, the company will have several invoicing streams (one main one in KSeF and one or two side ones), which ultimately should be aggregated by the accounting system into a single whole.
4 Offline mode and possible failure
Another specific issue that needs to be addressed is the possible failure of KSeF or technical difficulties in the taxpayer’s individual system on the KSeF – taxpayer system connection.
The enormity of the undertaking involved in the implementation of the KSeF determines that no one assumes that this implementation will take place smoothly. This is confirmed by the bill itself, which, as is also emphasised in the explanatory memorandum, provides solutions for issuing invoices in the situation of:
- unavailability of KSeF due to scheduled maintenance work on the system – the so-called offline mode;
- a KSeF failure (announced in a communication and via the interface);
- system failure (announced in a communication and through the interface);
- inability of the taxpayer to issue an e-invoice for reasons for which the taxpayer is responsible – the so-called “offline mode”.
In the first three cases, i.e. those involving a KSeF failure, the taxpayer will be obliged to enter an invoice previously generated in his own system into KSeF within seven days.
In the case of a malfunction attributable to the taxable person, on the other hand, such an invoice will have to be entered into KSeF the very next day after the causes of the malfunction have ceased to exist.
In this context, the aspect of the date of issue of the invoice, which we mentioned earlier, should be noted again. As we indicated above, the date of issue of a structured invoice is deemed to be the date on which it is sent to KSeF. When a structured invoice is assigned a KSeF number, it enters into legal circulation with the date of sending – issuing to KSeF. Therefore, in the standard case, the date entered in field P1 (corresponding to the date of issue of the document as defined in Article 106e sec. 1 point 1 of the Polish VAT Act) – except in special situations – is not crucial. What is key is the date on which the invoice is sent to KSeF, in accordance with Article 106na sec. 1 of the Polish VAT Act. However, the date of receipt of the invoice is deemed to be the date on which the KSeF number is assigned to that invoice. This date is visible to the recipient of the e-invoice in the system.
However, this particular situation is a breakdown or announced unavailability of the KSeF. In such a case, the completion by the taxable person of the P1 “date of issue” field in a particular structured invoice will be deemed to be the issue of the invoice on the date indicated by the taxable person in that field and will therefore determine the point at which the invoice enters legal circulation. However, if such an invoice is sent to the purchaser outside the KSeF, prior to its entry into that system, the actual date of receipt of the invoice by the taxpayer during the breakdown or offline period will be deemed to be the date of receipt.
In conclusion, it should be pointed out that it will be crucial for taxpayers to properly integrate their own systems with the KSeF and to carefully review emerging information on possible KSeF outages, as they will be important from the perspective of determining that crucial invoice date in a given situation.
5 Correcting note
Another novelty that will come into effect in tandem with the commencement of the KSeF will be the complete abolition of the institution of correction notes.
Currently, as we know, purchasers can make minor corrections to invoices received from a supplier with regard to, for example, some typos, descriptions of the goods or services purchased or even an obvious mistake in the identification numbers of the entrepreneur.
As of 1 July 2024, this will no longer be possible, as with the entry into force of the mandatory KSeF, correction notes will be abolished.
From that point onwards, any correction of an invoice will only be able to be made by the purchaser.
Thus, in our opinion, it will be necessary to establish a specific framework of cooperation between the purchaser and the supplier with regard to possible corrections, as well as to strive for a maximum level of agreement on the flow of information, which will allow to minimise the occurrence of such minor mistakes requiring correction.
In summary, with the entry into force of the KSeF, correction notes will disappear from legal circulation.
6 Correcting invoice
As we indicated in the previous section, correction notes will be entirely replaced by adjustments made in the form of correction invoices. As regards these invoices, it is indicated that they will have to be issued in KSeF in each case.
Importantly, when issuing them, it will be necessary to indicate the number of the adjusted invoice, the date of issue of the adjusted invoice and the KSeF number of the adjusted invoice.
At the same time, KSeF allows two types of adjustments:
- single-position (by difference) or
- two-position (was/is).
It is also important that in the case of summary invoices, their correction is to be done by indicating all the invoices to be corrected. It will not be possible to include them by a single entry or by indicating a range of numbers.
In addition, corrective invoices, once the mandatory KSeF comes into force, even if they were originally issued outside KSeF (due to the fact that they were issued before the mandatory e-invoicing rules came into force), must be issued in KSeF.
In summary, all modifications to the invoices issued, will have to be done through correction invoices. Also, if the invoice to be corrected was still issued in the standard way, i.e. before the mandatory KSeF regulation came into force.
7 Transfers with payment identifier
Another new aspect that will start to be relevant after the mandatory KSeF comes into force is the issue of the correct payment identifier for transfers made.
According to Article 108g of the Polish VAT Act, which is being implemented, when making transfers to active VAT taxpayers, it will be necessary to indicate in the title of the transfer the KSeF number of the invoice or the collective identifier assigned to multiple invoices.
Importantly, of course, it will not be necessary to indicate the invoice number assigned in KSeF if the payment instrument used (e.g. a card) does not provide for the possibility of entering such data. Thus, it can be inferred that such a number will be given when ordering payments primarily by bank transfer or direct debit.
The above obligation will come into effect on 1 July 2024 for payments under the split payment mechanism, and from 1 January 2025 for all transfers.
In summary, from 1 January 2025, and in the case of the split payment mechanism already from 1 July 2024, when making transfers, taxpayers will be obliged to title them by indicating the payment identifier specified in the KSeF specific to the transaction.
It is also worth noting one of the basic functionalities of the KSeF, i.e. the possibility to issue or receive invoices on the basis of granted authorisations.
Most importantly: such authorisations can be granted by a person representing a given entity on the basis of the primary authorisations held.
As indicated on the website of the Ministry of Finance, in the case of taxpayers who are natural persons, primary authorisations of an ownership nature are assigned automatically. Such a person does not have to declare anything. He can use the system by authorising himself with a Trusted Signature or a qualified electronic signature.
On the other hand, taxpayers who are not individuals and who have an electronic qualified stamp containing a TIN may use the KSeF on the basis of original ownership rights, without being notified to the tax office. In other cases, such a taxpayer, in order to use KSeF, must, through the ZAW-FA notice, designate an individual authorised to use KSeF on behalf of the organisation. This individual will also have the ability to assign further authority electronically within the system.
By default, when assigning further permissions to other individuals, we can authorise them to:
- grant permissions (i.e. such a person will also be able to grant permissions to further individuals);
- Issue invoices;
- access to invoices.
By the way, it is also worth noting that the authorisations granted to any person will not be terminated after a certain period of time. They will always have to be granted and then revoked manually.
In conclusion, an important element that will have to be regulated in the organisation is the question of the correct definition of the group of persons responsible for issuing invoices, as well as for receiving them.
Another important element worth noting is the issue of annexes, or rather the lack thereof. As a rule, the schema of a structured invoice contains certain obligatory or optional elements for invoices issued today – as specified in the legislation.
These fields of a given schema will be able to be completed with text up to a certain character limit. At the same time, it is important to note that it will not be possible to add any attachments to such a completed structured invoice, e.g. in the form of some kind of graphic markings, lists, etc., as the invoice will have to be filled in with text.
Therefore, in the situation of the necessity and or practice of attaching such attachments, it will be necessary to regulate with counterparties another way of transmitting them. Whether by a separate means (e.g. email) or by adding a link in the schema to enable the downloading of such attachments.
In summary, it will not be possible to add attachments to structured invoices.
10 QR code
A completely new aspect is the introduction of the legal obligation to use, so-called, QR codes. As indicated by the introduced Article 106gb(5) of the Polish VAT Act, the taxpayer will be obliged to mark a structured invoice with a code enabling access to that invoice in KSeF and enabling verification of the data contained in that invoice, in the event of:
- making it available to a purchaser who is not obliged to use KSeF, in a manner other than by means of the National e-Invoice System, or
- using this invoice outside the National e-Invoice System.
The above means that the taxpayer will be obliged to mark the structured invoice when used outside KSeF. As indicated in the explanatory memorandum to the Act, this solution will be based on the assumption that the taxpayer will be obliged to mark each structured invoice, when it is visualised, with a QR code. In turn, according to the Ministry, the KSeF is to provide a functionality allowing, through this code, verification that a given invoice has been issued in KSeF and that the data contained therein is correct. The taxpayer will have to mark each visualised invoice, e.g. in pdf format or in paper form, with a QR code.
Also importantly, there is to be a presumption that if a structured invoice used outside the KSeF is not marked with a QR code, it was issued outside the KSeF or was issued by an unauthorised entity. Hence, compliance with this obligation will be important.
In summary, this marking of structured invoices with a QR code is intended to enable any person who receives such an invoice, via a mobile device, to quickly and easily verify that it corresponds to the original data contained in the KSeF.