Mandatory e-invoicing in Poland one step closer: what will change in 2021?

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On 5 February 2021, the Polish Ministry of Finance published a draft law and began a public consultation on the introduction of e-invoicing in business-to-business (B2B) transactions. The Polish e-invoicing system is modelled after the Italian one, which took effect three years ago.

The draft law defines an e-invoice (“e-faktura” or “faktura ustrukturyzowana”) as an electronic invoice that will have to follow a prescribed structure and will be issued, received and exchanged through a centralized government-operated platform – the National E-invoicing System (Krajowy System e-Faktur, KSeF). Taxpayers will be able to start using the proposed e-invoicing system as from October 2021 and the obligation to do so will take effect in 2023. To implement mandatory e-invoicing in B2B situations, Poland will have to obtain an authorization from the European Commission as an obligation to issue invoices exclusively in a predefined electronic format constitutes a deviation from the provisions of the VAT Directive.

Under the proposed system, taxpayers will prepare invoices in their own ERP systems and send them via an API to the KSeF. In the KSeF, each invoice will be timestamped and assigned a number. For small businesses, there will also be a possibility to issue invoices in a government portal (eMikrofirma). As long as the use of the new system is voluntary, the supplier and the customer will have to agree on issuing and receiving e-invoices according to the new requirements.

According to the Ministry, the proposed e-invoicing system will bring a number of benefits for taxpayers: (1) no risk of invoice loss or destruction as all e-invoices will be stored in a central database, (2) standardization: no need to process different invoicing formats, (3) no need to issue duplicate invoices, (4) faster VAT refund: 40 instead of 60 days. Moreover, taxpayers using the new system will not be obliged to submit JPK_FA to the tax administration (JPK_FA is an electronic file containing the details of sales invoices and must be presented to the tax administration upon request). The Ministry estimates that 10% of taxpayers will opt to use the new e-invoicing system in 2021 and this number will increase by 10% next year.

In Poland, over 75% of businesses are currently using electronic invoicing. If the proposed system becomes mandatory and the KSeF will be the only valid way to exchange invoices, businesses will no longer be able to rely on their existing e-invoicing formats and transmission processes. Therefore, many businesses do not see any commercial value in the new e-invoicing requirements and point out that the only beneficiary will be the tax administration as it will obtain more granular and real-time data on taxpayers’’ operations.

The public consultation on the new e-invoicing requirements in B2B situations will end on 23 February. Subsequently, the draft law will be sent for parliamentary consideration. The legislative proposal and the structure of the proposed e-invoice are available on the government websites.