Mandatory e-invoices system (KSeF)

Dear Sirs,

As we have already informed in the previous alerts, intensive legislative works are currently being carried out in Poland on VAT regulations implementing the obligation to use the so-called "e-invoices" (i.e. issuing electronic invoices in a structured form, with the use of the KSeF government platform and a pre-defined template, the so-called "schema").

Last month, the update of government draft of amendments to the VAT Act took place, under which, inter alia, the date of introduction of the obligation to use the so-called "e-invoices" in Poland was postponed  to July 1, 2024.

Please note that the proposed amendments provide that the obligation to issue e-invoices using the KSeF government platform will apply from July 1, 2024 also to foreign entities having a fixed establishment in Poland  (even if they do not have a company or a branch in Poland), to the extent that this fixed establishment participates in transactions for which an invoice has been issued.

On the other hand, entities with neither a registered office nor a fixed establishment in Poland will be able to issue e-invoices on a voluntary basis July 1, 2024 (i.e. they will not have an obligation to issue electronic invoices on the government KSeF platform), as well as will be able, as a rule, to demand that invoices are provided by their Polish suppliers in a form other than via KSeF (e.g. in PDF form).

According to the above-mentioned draft of amendments, failure to comply with the requirements for mandatory e-invoicing will be ultimately subject to high penalties, i.e. up to 100% of the VAT amount in the case of failures in issuing invoices containing the VAT amount, and up to 18.7% of the total amount due in the case of failures in issuing invoices without VAT. At the same time, in the first stage of application of the new regulations (i.e. until 1 January 2025), penalties are not yet to be imposed.  Nevertheless, due to the time-consuming and complex process of implementing e-invoices, proper preparation for mandatory e-invoicing should become one of the business priorities for this year.

This alert is addressed only to our foreign customers.  Those of you who have not yet carried out an analysis of your business in the context of having a fixed establishment in Poland, should definitely consider such an analysis now – while there is still time for it.  The obligation to issue e-invoices via KSeF government platform after July 1, 2024 will depend on having a fixed establishment in Poland.

We also would like to point out that based on our experience, in certain cases, conducting a business analysis alone may not be sufficient. In such a situation, in order to obtain an unequivocal answer regarding the existence / non-existence of a fixed establishment in Poland (this, as a rule, applies to entities that do not have a company / operating branch in Poland), it will be necessary to apply for a tax ruling, the waiting time for which is at least 3 months (the application for tax ruling itself is a standard tool used in Poland, under which tax authorities confirm the status of a taxpayer). Hence, actions aimed at determining the possession / lack of a fixed establishment of business in Poland should be taken as soon as possible.

In the near future, we will inform all our clients about the details of the government bill and about further steps to be taken to prepare for mandatory e-invoicing, but in your case in the first phase it should be determined whether your business in Poland will be covered by e-invoicing obligation at all.  

If you are interested in an analysis regarding a fixed establishment for VAT purposes, please contact our Experts.