E-invoicing in Poland as the next step in the digitalisation of the Polish tax system

published on 8 May 2024 | reading time approx. 4 minutes

Poland is another EU country that is introducing an electronic invoicing system, the so-called National E-Invoicing System (Polish abbreviation: KSeF), into its national legislation and economy. Its implementation will not only change the functioning of accounting divisions and document workflow practices in companies, but will also have a significant impact on other areas of their operations, such as purchasing, sales, logistics and warehousing. It will be a revolution in invoicing, which, if done correctly, will save time spent on administrative work, provide tax security and improve safety of business transactions.

KSeF and its functionalities »
Sales invoices issued via KSeF »
KSeF and foreign entities »
Further steps to prepare for KSeF implementation »

KSeF and its functionalities

KSeF is a central ICT system for issuing, storing, sending and receiving structured electronic invoices (E-Invoices). Once it comes into force and becomes mandatory, the currently used paper invoices and electronic invoices in any format (e.g. PDFs sent by email as attachments) will no longer be used in the Polish legal system. Sales invoices will be issued via KSeF, meaning that the taxable person will prepare in his financial and accounting system a 'draft' invoice in a specific structured format, which he will then upload to KSeF. Upon receipt of such a document, the central platform will verify its correctness, in particular whether it meets the structural requirements, and, if it does, such a document will then be approved and assigned a unique identification number – the KSeF ID [1]. In this way, the invoice will be issued. However, if the system detects semantic errors, the invoice will not be generated. In such a case, after correcting the errors in the invoice structure, the taxable person should reupload the file to KSeF to issue the invoice. Once the invoice is generated and assigned a unique KSeF ID, the purchaser can download the document from the system. The supplier, in turn, can download an official confirmation of receipt (Polish abbreviation: UPO) confirming that the document has been issued.

In addition to the abovementioned functionalities, KSeF is also used for document archiving. Both the purchase invoices received and the sales invoices issued by the taxable person will be kept for ten years. It is worth mentioning that the statute of limitations on tax obligations in Poland is generally five years, which means that KSeF will keep records for longer. The current KSeF solutions for document archiving do not provide for an option to store attachments [2] and source documents accompanying issued invoices, e.g. delivery and acceptance records, shipping documents confirming the supply of goods to other EU Member States in order to apply the 0 Prozent VAT rate. The taxable person will have to keep all these documents using his own resources, outside of KSeF.

Another important role of KSeF is to enable revenue authorities to review data and conduct tax proceedings and tax inspections on the basis of the collected data in a way that minimises taxable persons’ involvement and ensures the efficiency of the actions taken. It is also important that the system is intended to help reduce the VAT gap and thus increase national revenue.

Sales invoices issued via KSeF

The KSeF system has been optional since 2022, and starting from 2026 [3] it is to be mandatory for VAT-registered taxable persons that have their registered offices in Poland and for foreign entities with fixed establishments in Poland. Therefore, three types of invoices are going to be used in business transactions until KSeF becomes mandatory:

paper invoices sent to recipients by letter or delivered by hand,
electronic invoices issued in compliance with current legislation, sent e.g. by email, provided via a commercial portal,
E-Invoices – structured invoices provided via KSeF.

Ultimately, only E-Invoices will be used in business dealings.

The obligation to issue sales invoices in KSeF applies to all sales invoices issued by VAT-registered taxable persons, provided that the invoices document B2B transactions [4] . This means that KSeF will be used to issue invoices documenting both domestic sales and foreign transactions, such as ICS or export of goods. In the case of invoices issued to foreign entities, e.g. to document an ICS, it will be necessary to generate the invoice in KSeF, then place a QR code on its visualisation and send the invoice to the foreign recipient in a manner previously agreed with him, e.g. by email as a PDF attachment. According to the advance tax ruling issued by Polish revenue authorities, intra-Community transfers of goods made by a taxable person within his own company will also have to be documented with invoices issued in KSeF. In such case, when moving goods between his own warehouses, a taxable person registered for VAT in Poland and in another EU country will have to document the transaction with a KSeF invoice.

Invoices issued via KSeF must be in .xml format compatible with the FA(2) logical structure. Depending on the size of the company, the number of transactions and the IT systems used, invoices can be issued using an application provided by the Polish revenue authorities (in the case of entities generating a small number of sales documents) or using commercial tools (various connectors, interfaces, changes to the existing software). Each taxable person can choose an appropriate solution, depending on the financial and accounting software they use and the size of their business. When considering the optimal solution, it is necessary to examine both the internal needs of the company (in particular the volume of transactions, the document workflows used) and in its arrangements with contractors.

KSeF and foreign entities

KSeF will remain voluntary for foreign entities registered for VAT in Poland which either have no fixed establishment here or whose fixed establishment is not involved in the transaction documented by a KSeF invoice. As the guidance on when a foreign entity has a fixed establishment in Poland is important both for the foreign entity (so that it can determine whether or not KSeF is obligatory for it) and for its contractors (so that they know whether they only need to issue invoices to the foreign entity via KSeF or whether they must additionally submit them in an agreed form), it is worth resolving this issue in advance. Given that Polish legislation does not define a fixed establishment and the practice refers to the EU definition of this term, the CJEU case law and the case law and rulings developed on its basis by Polish revenue authorities, the safest solution is to request a binding advance tax ruling to have it confirmed whether or not a foreign entity has a fixed establishment in Poland.

Another important aspect is that some foreign entities without a fixed establishment in Poland may be faced with the necessity to implement KSeF to stay competitive on the Polish market. This is because Polish customers who will adapt their document workflows so as to download purchase invoices from KSeF will prefer suppliers who provide purchase invoices via KSeF. This applies in particular to supplies of goods in Poland, which require invoices showing Polish VAT. In such a case, changing the document workflows and adapting the company's procedures and processes to receive and accept purchase invoices transmitted via KSeF will result in preference being given to suppliers who issue their sales invoices also via KSeF.

Further steps to prepare for KSeF implementation

In order to prepare well for the change, it is first necessary to carefully analyse the needs of the company in order to decide how best to use KSeF in the future. It is necessary to examine all areas of the company’s operations in terms of the number and type of transactions it makes and the documentation it needs and stores. The existing accounting procedures and processes, including document workflows, will need to be changed. It will be necessary to redefine the authorisations given to employees to accept purchase invoices for posting and payment (very important in the case of invoices paid by employees e.g. on business trips). An important point will also be the arrangements with contractors, in particular foreign ones, with regard to the invoice delivery method or a potential fixed establishment in Poland; arrangements with national contractors will have to be revised in terms of, for example, defining payment deadlines dependent on the invoice issue date or the provision of attachments that are currently attached to the invoice.

It is also worth considering the mapping of accounts to the new schema in order to simplify and digitalise the posting of invoices as much as possible.

To rectify any errors in an e-invoice, a structured correcting invoice will need to be issued. Correcting notes (in Polish: nota korygująca) will no longer be used in business dealings. Duplicate invoices will not be needed either. Therefore, it is necessary to adapt to the new requirements for documenting business transactions.

The document storage procedure will change, too. Ultimately, fewer paper documents will be kept in the accounting department.

As the introduction of KSeF will revolutionise invoicing, every business should have enough time to prepare for the change. Therefore, it is a good idea to start preparing for it now.

[1] The KSeF ID is to consist of 35 characters and is ultimately to be used to identify documents in the system.

[2] As announced by the Ministry of Finance, the option to send and archive attachments may be introduced only for certain industries, e.g. fuels, telecommunications, media.

[3] As announced by the Ministry of Finance, KSeF is to be mandatory from 1 February 2026 for large enterprises, i.e. those whose annual revenues exceed 200 million zloty, and from 1 April 2026 for others. It is also possible that KSeF will be mandatory from 1 February 2026 for all enterprises.

[4] Originally, the solution was to apply only to invoices issued to VAT-registered taxable persons (in B2B transactions). Following public consultation, the Polish Ministry of Finance is considering whether or not to extend this system to invoices issued to consumers (in B2C transactions) on a voluntary basis.