KSeF - are the systems ready in Poland?
The topic KSeF or National System of e-Invoices is one of the most topical issues in finance and accounting departments. The KSeF system allows the issuance and sending of structured invoices and the format of structured invoices must comply with the logical structure of the FA e-Invoice published in the Central Repository of Electronic Document Templates (Polish abbreviation CRWDE) on the ePUAP platform. Poland is trying to introduce mandatory e-invoicing, but the question is whether the KSeF system and companies’ IT systems are ready?
Who is using KSeF?
The KSeF system is available for the following entities:
- Entrepreneurs registered as active VAT taxpayers,
- Entrepreneurs exempt from VAT,
- Taxpayers identified in Poland for the special EU OSS procedure, with a Polish tax identifier NIP.
KSeF- since when
In Poland, from the beginning of 2022, taxpayers have the option of using structured invoices. On June 17 of this year, the EU Council agreed to make the use of the structured invoice system mandatory from 1.1.2024. According to the Council’s decision, the system may be in force for 3 years, i.e. until the end of 2026. This deadline may be extended (Council Implementing Decision (EU) 2022/1003 of June 17, 2022 authorizing the Republic of Poland to apply a special measure derogating from Articles 218 and 232 of Directive 2006/112/EC on the common system of value added tax (Official Journal of the EU L 168, 27.6.2022, pp. 81-83)).
Poland is not the only country moving to introduce a mandatory e-invoicing process. Italy has already implemented such a system and other countries, such as France, are in the process of implementing a similar system.
So far in Poland, no legislation has emerged on the mandatory entry of the use of structured invoices. At the beginning of December 2022, the list of legislative and programmatic work of the Council of Ministers published the assumptions of the draft Law on Value Added Tax, which provides for the introduction of mandatory issuance of VAT invoices using the National System of e-Invoices.
What elements does a structured invoice contain?
It should be noted that the e-invoice in the National System of e-Invoices is not the same as the electronic invoices previously in business. For example, those in pdf format, sent by e-mail. A structured invoice is described in an xsd schema, in which all possible fields appearing on the invoice are defined, grouped into sections:
- header section,
- seller section,
- buyer section,
- section of third parties that may be involved in the transaction,
- FA section – information fields and footer.
The structured invoice will be sent in xml format to the pages of the Ministry of Finance. As a result, in addition to the seller and the recipient, in the future it will be mandatory for the Ministry of Finance server to participate in the process of sending invoices. If the data sent to the Ministry of Finance website does not conform to the official scheme, it will be rejected. Consequently, no KSeF number will be assigned, so we will not be dealing with a VAT invoice. That’s why it’s so important to set up invoicing systems correctly for data compatibility.
Scope of invoicing covered by KSeF
The scope of invoicing covered by the KSeF system is broad: includes all transactions documented with VAT invoices between businesses, as well as consumers (B2B and B2C transactions) domestic and foreign. Also including intra-Community supply of goods and exports. For purchase invoices, KSeF will only work for domestic invoices.
Exclusions from KSeF:
- Invoices issued to receipts using a cash register,
- Adjustment notes,
- Simplified invoices (gross value less than PLN 450),
- Sales documented with documents other than invoices (e.g., notes),
- The process of issuing duplicate VAT invoices will be eliminated.
CHANGES IN FINANCIAL AND ACCOUNTING PROCESSES
After the introduction of a mandatory e-invoicing system, the financial and accounting processes that exist in companies will undoubtedly change. This includes, among others:
- The process of document circulation in the enterprise.
- Planned settlement (invoicing) cycles.
The date of issuance of the document will be the date of transmission to KSeF, while the date of receipt of the invoice using KSeF in accordance with Article 106na (3) of the Amendment Act will be the date of assignment in KSeF of the number identifying the invoice. Thus, the legislator does not equate the date of issue with the date of receipt of a structured invoice.
In addition, it is important to remember to properly plan the invoicing processes from the side of those dedicated to invoicing. To submit sales invoices to the KSeF system, only notified persons will be authorized on behalf of the taxpayer.
- Changes to financial and accounting systems iand billing systems for integration with KSeF.
- The process of obtaining data and sending data to counterparties.
The KSeF system does not allow you to add any additional documents, such as attachments, which are sometimes a necessary supplementary element to an invoice, and without this information it is not possible to properly record the accounting document.
- Cooperation with foreign counterparties.
Since foreign purchase invoices will not be covered by KSeF, an alternative circulation system for these documents must be provided.
- Intra-group settlements.
When both domestic and foreign entities appear in the structure of a Capital group, we will have duality in the issuance and transmission of sales and purchase invoices.. Domestic entities will use the KSeF system to exchange documents, while invoices sent to foreign entities will be subject to an alternative process.
Sales invoicing
Currently, in the practice of many entities, there are different ways of issuing sales invoices. For example: in the financial and accounting system, in the billing system, outside the system (paper, Excel). Even for a single taxpayer, all of the aforementioned invoicing methods can occur.
In the popular SAP system, invoicing is done in the SD module. On the other hand, in entities where there are large volumes of invoiced data, such as telecommunications, media and transportation companies, dedicated billing systems are used to manage the invoicing process.
Once KSeF is mandatory, it is absolutely necessary to integrate invoicing systems with the Ministry of Finance’s system. It is necessary to ensure smooth and uninterrupted sending of relevant data adapted to the schema in xml format. Once submitted, the data is validated by the Ministry of Finance’s application. If the correct data is accepted, the KSeF system system assigns a reference number along with the date and time. The invoice date is the date of submission to KSeF.
A very important change compared to the systems in place today is that once an invoice is submitted to KSeF, it is not possible to correct any data. The only way to correct this is to issue a correcting invoice.
Attention should be paid to developing an alternative way of sending invoice attachments, such as calculations, elements of calculation of amounts, etc. Admittedly, you can’t send attachments via KSeF, but there is an option to include the attachment reference number of the invoice in question as well as to include a link to download the attachment from shared resources.
For invoices issued manually, the schemes in the KSeF system will also have to be filled in manually.
TECHNICAL ISSUES
If submitting invoices to the KSeF system does not seem like a very complicated process, collecting feedback is already a more complex procedure in financial and accounting systems. The reference number assigned by KSeF should be downloaded from the pages of the Ministry of Finance and placed in the systems – in order to uniquely identify invoices.
Due to the fact that only the assignment of the KSeF number will determine the fact that an invoice has been issued, it is very important to develop a procedure for dealing with cases when, for technical reasons, invoices are not loaded on the KSeF website (e.g., due to the unavailability of Ministry of Finance servers at the time of upload). The taxpayer must respond quickly to a situation involving failure to read invoices. While it is true that the Ministry of Finance declares that the system will always be available, in practice it is safer to develop alternative ways to deliver invoices to KSeF. For example, it is possible to use manual filling of schemes. However, such a strategy will not work when large volumes of data need to be sent. At this point, the regulations do not provide for an alternative way of issuing a sales invoice, such as on paper.
Purchase invoices
The KSeF system will include domestic purchase invoices, outside of this system will be foreign invoices, as well as simplified invoices and other documents that do not fall under the obligation to be included in KSeF.
Until now, the process of capturing purchase invoices involved scanning invoices received in paper form or the OCR process of invoices received in electronic form. Then the documents are subjected to verification, approval in accordance with the authorization process adopted by the company, and in the final phase the documents are subjected to accounting in the financial and accounting system.
It can be stated that the part related to the OCR process of electronic or scanned invoices – will be eliminated, as domestic invoices will be able to be downloaded in another way from the KSeF system. So we are facing increased automation in the purchase invoice accounting process. The xml files for purchase invoices will be able to be loaded into accounting systems and visualized in any web browser.
However, the purchasing process must also be adapted to handle attachments to domestic purchase invoices and foreign invoices, as they will not be able to be downloaded from the KSeF system.
Will the introduction of mandatory KSeF result in a complete shift away from paper invoices? Certainly, the way of invoicing will be standardized and the paper form of invoices will be significantly reduced. On the other hand, due to existing exceptions, companies need to prepare to handle an alternative invoice workflow process.
Author: Katarzyna Opalko, Manager of the Accounting area in MDDP Outsourcing.
Sources:
Act of October 29, 2021 on amending the Law on Value Added Tax and some other laws.
Council Implementing Decision (EU) 2022/1003 of June 17, 2022 authorizing the Republic of Poland to apply a special measure derogating from Articles 218 and 232 of Directive 2006/112/EC on the common system of value added tax (Official Journal of the EU L 168, 27.6.2022, pp. 81-83).
