National e-Faktur system is to start from 1 January 2022

On the website of the government's legislative centre, the draft bill on the amendment of the Goods and Services Tax Act and some other laws of 1 July 2021. As we can read in the Ministry of Finance's commentary on the project – introducing the possibility of issuing structured invoices, which are to have XML format, will be one from the accepted forms of documentation of sales, in addition to paper invoices and current economic electronic invoices.

The Ministry envisages that the proposed changes will provide, in particular, a two-way advantage, i.e. both in terms of simplification of the clearing process with entrepreneurs and the remote traceability of invoices by tax authorities.

Mandatory system from 2023

According to the transitional provisions of the Act, the amendments would enter into force on the day 1 January 2022 They will be optional. However, according to the announcements of Undersecretary of State Jan Sarnowski, the system will become mandatory from 2023: „Here we are.

fourth a country in the European Union that introduces e-invoicing. End 2021 in a voluntary formula followed by 2023 mandatory’[1]. The Ministry of Finance is based on experience in applying this solution, which has been implemented in Spain, Portugal and Italy.

As is the justification for the proposed changes, structured invoices are to be issued and received by taxpayers using the electronic system, the National e-Faktur System (KSeF).

As explained above: ‘The receipt of invoices structured using KSeF will require acceptance of the recipient of such invoice. Consent should be given on the same basis as for electronic invoices. The system will not support the buyer's acceptance process as to how to receive structured invoices.

Where the recipient of the structured invoice does not agree to receive it using the KSeF, the issuer shall retain the right to issue the invoice structured in the system, and the invoice thus issued shall be sent to the recipient in another manner agreed with him, e.g. by e-mail in electronic or paper form.’

Exemption from archiving obligations and other facilities

The use of this form of invoicing will result in exemption from the obligation for taxpayers to store and archive them[2].

In addition to the taxpayer, access to structured invoices and the possibility of issuing them will also be ensured for persons authorised by them, e.g. their employees or the accounting office with which they cooperate. It will also be necessary to authorize the user in the system.

Moreover, in this case, the provisions of the Goods and Services Tax Act on the issue of duplicate invoices set out in Article 106l the abovementioned Act, since the structured invoice issued through the KSeF system will not be able to be lost or destroyed.

At this point it is worth noting that (according to its name) structured invoices will be prepared in tax and accounting systems of the taxpayer according to the formula provided by the Minister of Finance [3].

According to the draft changes, to Article 106m(5) Goods and Services Tax Act in addition to point 1 and 2 added point 3, which will include the words ‘National e-Factur System’ in the content, which will mean that the use of KSeF will preserve the authenticity of the origin and integrity of the content of the electronic invoice.

In addition, the bill will be added Article 112aa, according to which structured invoices are to be stored in the National e-Faktur System for a period of time 10 years from the end of the year in which they were issued and in the event of the expiry of the limitation period of the tax liability after that period, until the expiry of the limitation period of the tax liability [4].

As can be seen in the ministerial letter on the impact assessment, in the assessment of the ministry, the standardized invoice model will reduce business costs associated with handling the invoicing process and increase the speed of data exchange.

The Ministry also argues in this document that the deepening of the automation of accounting processes should have a positive impact on the reduction of the number of errors. Furthermore, according to the MF, the implementation of the KSeF will enable economic events to be analysed even before the deadline for tax returns.

The analytical processes related to the combination of payments with an invoice should also be improved, which is intended to help potentially secure the state budget by retaining funds in the bank account [5].

Reduced VAT refund

Importantly, the proposed law introduces a preference in the form of a shorter deadline for VAT reimbursement 60 days to 40 days under certain conditions (which must be met together) – such as the need to be a registered VAT taxable person active by at least 12 the months preceding the period for which the tax difference to be refunded or the holding of a clearing account or of a registered account in the SKOC has been established for at least the same time [6].

It can be concluded that the new ICT system KSeF contains a number of facilities for both entrepreneurs and the Ministry of Finance. In this context, it also appears necessary to highlight existing risks for companies, such as the necessary adapted financial and accounting systems to the new regulations and the emergence of another system of supervision of tax authorities over the activities of the taxpayer.

Written by Mateusz Krawczyński

A junior tax consultant in Russell Bedford Poland. Graduated from bachelor's degree in Logistics and Master's degree in Finance and Accounting. Previous professional experience in one of the so-called Big Four companies. He specializes in tax on goods and services, in particular with regard to VAT settlements in local government units.