Next year we are in for another big change in VAT reporting. On 1 July 2024 we will most likely see the introduction of mandatory use of structured invoices and the National E-Invoicing System (KSeF). Business will do best not to postpone preparations until the last moment as KSeF implementation is complicated and time-consuming. It requires deep interference in the financial and accounting modules of the ERP software and in invoicing and document flow processes. So there is every reason to start acting now. Sendero Tax & Legal will be happy to provide KSeF workshops to your staff and assist you in gap analysis.
What is KSeF and what is a structured invoice?
The National E-Invoicing System (in Polish abbreviated to KSeF) is the government-provided IT platform used to issue, send, receive and keep electronic invoices.
A structured invoice (also called e-invoice) is an invoice issued in an electronic form in the XML format using KSeF. Structured invoices must comply with the minimum content requirements of the VAT Act, but can also contain additional information. The data should be arranged in a specific manner arising from the logical structure (schema) provided by Finance Ministry. As of mid-2014, e-invoices will generally remain the only acceptable evidence of transactions between taxable persons for VAT purposes.
Who will be required to use e-invoices and KSeF?
KSeF and structured invoices will apply to all taxable persons who are established in Poland or have their residence or fixed establishment there.
KSeF launch – how to prepare?
A good advice is to ensure KSeF implementation is preceded by:
- A workshop for the accounting and financial function on the new law and KSeF functionalities. The workshop should address both major KSeF and structured invoice regulations (including rights, sanctions and deadlines) and structured invoice content (elements and fields of the schema).
- A gap analysis to identify those invoicing processes and those areas of the ERP software’s financial and accounting modules which will need to be changed or supplemented for KSeF purposes.
Sendero Tax & Legal experts will be pleased to provide any support in both those tasks which you may require.
As a further stage of the KSeF implementation process, IT specialists should be involved to adjust the software to KSeF requirements.
What challenges are associated with KSeF implementation and e-invoicing preparation?
When preparing your organisation for the new invoicing standard, you may be interested to know this:
- Your ERP software’s financial and accounting modules will need to be adjusted for KSeF requirements. Organisations which issue and receive hundreds or thousands of documents monthly should implement dedicated IT solutions customised for their ERP applications. By way of example, the software should enable the issuance, receipt and sending of structured invoices, support KSeF communications via API, and ensure KSeF user authentication.
- KSeF implementation takes plenty of time and involves administrative and financial burdens. The implementation process is multifaceted and based on a coordinated interface between company personnel and various experts. Great majority of the work is in the hands of software developers and IT consultants, but effective project management and business input is no less important (e.g. decisions as to what information should be placed on e-invoices).
- You need to decide what data and information will find their way into e-invoices. Structured invoice elements and fields may be mandatory, optional or facultative and may even reach a total of several hundred. Structured invoices will have no attachments allowed. The new solution gives businesses many interesting opportunities to be used in business relations but it is a no mean feat to find your way in the maze of documents relating to the structure and implement the new invoicing concept.
- You need to redefine your invoicing and document flow processes. Invoices will be issued and sent to domestic customers via KSeF, as opposed to the previous practice of sending them on paper or in any electronic format. For foreign customers, you will generally have to issue the invoice using KSeF but send it in some other agreed way. As to the supply side, domestic invoices will also be received via KSeF, so you will no longer have to input them manually or by OCR.
- The financial and accounting functions must get to know the new regulations, the KSeF functionalities and the new software tools. Training is thus strongly advisable for key personnel to become familiar with the practical side of the new solutions, preferably even before KSeF becomes mandatory.
- Failure to use KSeF and structured invoices will be punishable as of 2025. If an invoice is issued outside the system, the issuer will be punished by a monetary fine equal to the tax amount stated on the invoice or 18.7% of the total amount due if the invoice is without tax.
- You need to master the ins and outs and the technicalities. The regulations and documents relating to mandatory KSeF contain lots of specific solutions that may pass unnoticed. Any information about them is dispersed and phrased in legal or IT jargon. Examples:
- In addition to the standard invoice number assigned by the issuer, structured invoices will also have unique numbers assigned by KSeF which will be visible not in the invoice content but in the official acknowledgement of receipt (UPO). Structured correcting invoices are the only exception as they will need to feature the KSeF number of the original invoices.
- Payment reference will have to contain the structured invoice number as of 2025.
Structured invoices will have to include QR codes