National System of e-Invoices – everything you need to know

The National System of e-Invoices (KSeF) will become a mandatory system for communication in business-to-business as of July 1st, 2024, but the topic is already causing controversy.

Under the new National System of e-Invoices, the direct exchange of invoices between contractors will no longer be legal and will be replaced by a national system, covering 100% of business-to-business transactions.

Thus, in 2024 Poland will become another European country with a nationwide e-invoice program implemented, following in the footsteps of France and Italy, among others.

The Government has not yet published explanatory notes explaining the intricacies of the new system and effective ways to comply with the new rules. For this reason, preparing guidelines on the full transfer to the new system seems extremely difficult for the time being.

It is also worth remembering that for small and medium-sized VAT-exempt businesses, the use of the National System of e-Invoices will be mandatory only as of January 1st, 2025.

Advantages of the National System of e-Invoices

The introduction of a communication system with a national scope is certainly a step in the right direction. The implementation of National System of e-Invoices will make it possible to optimize processes related to invoices, document circulation, and the use of invoice systems by businesses. Circulation of e-invoices will become faster and less costly, due to the reduction in printing effort.

Access to key information will become instant and centralized, making it easier for companies and taxpayers to report, analyze, and summarize their financials.

The process of cataloging and archiving invoices will also be automated. This will open up the market for outsourcing companies thanks to several facilitations related to the security of financial document storage. Also, duplicate invoices will no longer be needed.

Using e-invoices eliminates the need to manually transcribe data from paper documents into the system (or use OCR technology), which reduces the risk of human error.

Taxpayers using KSeF who request a refund of input VAT will receive a refund within 40 days instead of 60 days (as was the case before the introduction of the new system).

The new regulations will also allow, via the expansion of the KAS and PUESC systems, to automate the communication of binding information, such as:

• BTI (binding tariff information),
• WIP (binding origin information),
• WIA (binding excise information),
• WIS (binding rate information).

Another advantage of National System of e-Invoices will be the reduction of certain obligations, e.g. the need to send the structure of the Unified Control File for JPK invoices at the request of tax authorities. This will be abolished, as the authorities will provide immediate insight for audit authorities.

Authentication methods in the National System of e-Invoices

The National System of e-Invoices offers various authentication methods, such as:

• Qualified electronic signature: an individual using KSeF can authenticate through a qualified electronic signature.
• Trusted Signature (Trusted Profile): individuals can also use the Trusted Profile to authenticate, or use the API to generate a pre-assigned token.
• Qualified Electronic Seal: companies can authenticate in the system using a qualified electronic seal.
• A token (a string of alphanumeric characters generated during an active session) that will be assigned to an individual. An individual may also use a token assigned to himself for authentication.

As it turns out, for entities that are not individuals (not natural persons), there is the option of authorization through a Qualified Eectronic Seal. In addition, it is possible to file a ZAW-FA notice with the relevant office, where a specific individual from the company must be designated as authorized.

Details related to KSeF to keep in mind

• New logical structure

The logical structure of FA(2) invoices is part of the KSeF regulation, which came into effect as early as September this year. The API, KSeF’s operating system, has already been prepared to support the new system and XML 2.5 file format as of September 2023 – as part of the voluntary phase of using the system. The FA(2) structure is available for download and review on government websites. A template of the updated structure is also available on the podatki.gov.pl website under KSeF XML document structures.

• KSeF as an exclusive invoice exchanging system – the risk of a fine

This may seem obvious, but it should be constantly reminded: The National e-Invoice System will become the exclusive legitimate invoice exchange system as of July 1st, 2024. The legislator has ensured that KSeF will manage communication completely in this aspect, providing financial penalties for entrepreneurs for non-compliance with the new regulations.

• Distinguishing between B2B and B2C transactions

This is the most controversial issue, as the Ministry of Finance still has not published clear guidelines for distinguishing transaction types in terms of parties to the contract. KSeF, by definition, excludes invoices resulting from B2C transactions, although we are not aware of precise criteria that will clearly distinguish between B2B and B2C transactions.

• Storage of invoices in the National System of e-Invoices

The Ministry of Finance guarantees secure and long-term storage of e-invoices within the system. But, at the same time, recommends the use of archiving methods external to the system. This is a clear signal to entrepreneurs that it is nevertheless worth preparing alternative sources in case of unpredictable errors or financial audits. KSeF assigns each invoice a unique ID number for 10 years. After this period there will probably be a redesignation of the ID, this will be further explained in the guidelines to the KSeF, which the government side is still working on.

• Obligations accompanying the transfer to KSeF

We need to keep in mind that not only the routines for sending invoices within the KSeF system should change, but also many additional factors, such as:

• reviewing contracts with entities that currently deal with the circulation/storage of financial documents;
• regulation documents within companies, if they include information on data processing;
• adjustment and training of staff in the use of new systems;
• revision of cooperation agreements with external accounting offices and outsourcing companies;
• modifying own e-invoicing programs (if there are any) so that they can communicate with the API of the National System of e-Invoices.

The new obligations will apply to about 2.8 million VAT-paying entities, including about 2 million entities active in the VAT domain.

Waiting for the governmental guidelines

As of the date of publication of this article, the Ministry had still not published detailed guidelines on contentious issues (such as determining an entity’s actual place of business) and had not made public the tax guidelines that will be relied upon for interpretation.

The clarifications will certainly allow to start the complete and most efficient process of adapting software and staff to the requirements of the National System of e-Invoices.

Useful links and downloadable content

• Documentation of the logical structure of the FA e-Invoice(2) – Link
• Information brochure of the logical structure of the FA(2) e-Invoice from September 1, 2023 – Link
• KSeF Taxpayer Application User’s Manual – Link
• XML document structure – Link
• Webinar of 07/04/2022 on the KSeF Taxpayer Application – Link
• Webinar of 25.11.2021 on integration with the National System of e-Invoice – Link