, ,

Poland’s E-Invoicing Reform: Overview of KSeF System

Joanna Hysi
December 14, 2021

Since earlier this year, when the first draft continuous transaction controls (CTC) legislation was published in Poland, there’s been good progress in the development of the CTC framework and system, the Krajowy System e-Faktur (KSeF).

After several reiterations, the CTC legislation was finally adopted and published on the Official Gazette on 18 November 2021. Implementing legislation regulating different aspects of the CTC system, e.g., the authentication and inbound processes, is underway and the technical documentation and the test environment are continuously updated.

According to the latest documentation, these are the key features of the KSeF framework:

  • Scope: KSeF is Poland’s new e-invoicing system which utilises a centralised platform for issuing, receiving and archiving e-invoices in business-to-business (B2B) relationships. A structured e-invoice can be issued for business-to-consumer (B2C) transactions if requested by the customer. Business-to-government (B2G) transactions are processed under a separate Peppol-based system, the PEF, which has been in place for some time.
  • Voluntary phase: Starting from January 2022, KSeF goes live as a voluntary system, meaning there is no obligation to use this e-invoicing system in B2B transactions. Certain benefits are offered to taxpayers who opt to use the CTC system to encourage adoption, including quicker tax refunds and exemption from the need to submit the SAF-T file, JPK_FA (report of invoices). If buyers don’t accept to receive structured e-invoices through KSeF, suppliers are still free to use KseF to issue their e-invoices and receive the associated benefits. Still, they must continue to send the invoice to the buyer out-of-band in the agreed form and format (paper, PDF, EDI etc.).
  • Mandatory phase: It is expected that the system will be mandatory in 2023, but no defined date has been set yet.
  • Clearance process: KSeF is a clearance system whereby e-invoices are sent to a centralised platform in a regulated structured XML-based format, the FA_VAT, according to the API and schema specifications. The system validates the invoice against the schema specifications, and if it passes the validation, assigns a unique ID to the invoice, which identifies the invoice in KSeF. The structured e-invoice containing the unique ID number is considered the legal invoice and is made available to the buyer through the KSeF.
  • New structured e-invoice: The structured e-invoice, the FA_VAT, is a new type of e-invoice as it includes more than standard invoice data required under the VAT e-invoicing rules, such as payment data, data related to the settlement of customs duties, data on the transaction terms. In many ways, it is similar to the JPK_FA with around 67 fields in common, making the JPK_FA redundant.
  • Integrity and authenticity of structured e-invoice: Issuing and receiving e-invoices through the KSeF is added to the existing list of e-invoice integrity and authenticity methods listed in the Polish VAT law (EDI, BCAT, e-signatures etc.). This means that, during the voluntary phase, suppliers and buyers can rely on the KSeF e-invoicing process to ensure the integrity and authenticity of their e-invoices. Once it becomes mandatory, issuing and receiving e-invoices through KSeF will be the only permitted method to comply with the integrity and authenticity requirements of the VAT law.
  • Authentication method: A qualified e-signature or seal (QES) is one of the accepted methods for authenticating the taxpayer or authorised entity in the system, e.g. accountant, third-party service provider. Details about how the authentication process will work technically is to be confirmed in subsequent documentation.
  • Archiving: KSeF offers an archiving functionality for taxpayers who wish to archive their e-invoices in the CTC system during the voluntary phase. During the mandatory phase, e-invoices will be archived automatically in KSeF for ten years (subject to the taxpayer’s authorisation following data privacy rules such as GDPR), which will provide the tax administration with immediate access to stored e-invoices and thus facilitate tax audits. Therefore, the existing VAT rules (articles 112 and 112a of the Polish VAT law) stating taxpayers must store their e-invoices until the end of the statutory storage period, will become obsolete. However, taxpayers will most likely still store e-invoices in their archive to ensure they have evidence in case of a dispute against the tax authority.

The Polish authorities have made a considerable effort to make all the required documentation and details available in time for the system’s roll-out in January 2022. However, certain key details regarding the process are expected to be clarified in the updated test environment scheduled for release on 13 December 2021.

Take Action

Still have questions about Poland’s new e-invoicing CTC mandate? Get in touch with Sovos’ team of tax experts for more information.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Joanna Hysi

Joanna is a Senior Regulatory Counsel at Sovos. Based in Stockholm and originally from Greece, Joanna’s background is in commercial and corporate law with research focus on EU law and financial innovation. Joanna earned her degree in Law in Greece and her masters in Commercial and Corporate from London School of Economics and Political Science (LSE) in London.
Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

EMEA IPT
May 25, 2022
IPT – Goods in Transit Location of Risk

For Insurance Premium Tax, location of risk is vital in determining the correct tax. In this episode of the Sovos Expert Series, Anita Blanusic asks Russell Brown, Senior Consulting Manager to explain the location of risk for goods in transit and how it’s determined. Listen as he answers the following questions: What is goods in […]

EMEA IPT
May 25, 2022
Meet the Expert: Hooda Greig, Compliance Services Manager – IPT

Meet the Expert is our series of blogs where we share more about the team behind our innovative software and managed services. As a global organisation with indirect tax experts across all regions, our dedicated team are often the first to know about new regulatory changes and the latest developments on tax regimes across the world, […]

North America Sales & Use Tax
May 24, 2022
3 Reasons for Automated Sales Tax Compliance

At this point, knowing that increasingly complex sales tax requirements exist is not the issue. Organizations know that they’re facing more complicated rules and regulations, but it’s more a matter of taking the time to invest in the necessary tools to properly face those challenges. With an automated sales tax compliance solution, businesses can better […]

North America Tax Information Reporting
May 24, 2022
Insurance Statutory Reporting Due Dates

Insurance statutory reporting filing due dates for the National Association of Insurance Commissioners (NAIC) are spread across the calendar year causing a jumble of different deadlines that apply to certain insurers. The quarterly and annual filings can be easier to remember, but the additional filings certain insurers are required to submit can be tricky to […]

EMEA VAT & Fiscal Reporting
May 24, 2022
The Effect of Inflation on VAT Rates

It’s no surprise that inflation is on the forefront of everyone’s mind, with prices continuing to sky-rocket month by month. Data from the United Kingdom shows that the Consumer Prices Index (CPI) inflation jumped to a 40-year high of 9% in the past 12 months. Governments around the world are looking for ways to reduce […]