The National e-Invoice System (KSeF)

The main challenges faced by taxpayers

The National e-Invoice System (KSeF) is an initiative introduced in Poland that will revolutionise the process of issuing and receiving VAT invoices. The system was launched in January 2022 in an optional form, with its mandatory use expected to start from July 2024.

One of the main challenges companies currently face is building their own tools or finding off-the-shelf solutions that meet all e-Invoice compliance criteria and integrating them with the tax function.

Implementing a new e-invoice system requires conforming to certain standards, such as document structures, and registering documents on the government platform. This can be challenging for many businesses, especially large organisations with hundreds of thousands of documents to process in the new format.

The aim of this article is to explain the key challenges of implementing KSeF and to suggest solutions and assistance to help companies prepare for their new responsibilities. The authors highlight the key success factors that are crucial for the correct implementation of the new e-Invoice process.

Determining the specific requirements to implement e-Invoices/ The main challenges faced by taxpayers

The National e-Invoice System was officially launched on 1 January 2022. Structured invoices are issued by taxpayers through the Ministry of Finance’s ICT system, the National e-Invoice System (KSeF). This system is used to issue, receive and store invoices.

Initially, the use of the KSeF system was optional, largely due to major regulatory shortcomings and the fact it was full of technical inaccuracies. It was not until the most recent amendment to the bill that the solutions called for in the public consultation were introduced. As a result, the deadline for making the system compulsory for all VAT invoices in Polish business transactions has been extended six months to 1 July 2024.

Although the deadline seems distant, one should not forget the scale of the changes and the enormity of the preparations, not only technical, but also substantive – especially in terms of the tax issues that the taxpayer will have to introduce in order to remain in compliance with the new requirements.

Below, we outline the legal and tax aspects of the system, its practical challenges that the taxpayer will have to face in order to avoid tax risks due to the improper use of the KSeF system.

A taxpayer who, in breach of their obligation, fails to issue an invoice using the National e-Invoice System, issues an invoice inconsistent with the template provided, or fails to send an invoice to the National e-Invoice System on time, will be fined by the head of the tax office. This penalty can be up to 100 per cent of the amount of tax shown on an invoice issued outside of the National e-Invoice System or, in the case of an invoice without any tax shown, a fine of up to 18.7 per cent of the total amount on that invoice issued outside the National e-Invoice System.

The tax authorities have full access to the data in KSeF.

From 1 July 2024, the tax authorities will be able to see very detailed transaction data on an ongoing basis – at the time of invoicing. Care and diligence must be taken when submitting e-invoice data, as well as verifying the details correctly, in accordance with the provisions of the VAT Act.

Together with the information from single control files (JPK), with the appropriate analytical tools, it is possible to very precisely catch irregularities in VAT accounting.

The transition to a new invoicing system requires not only technological but also business and procedural changes. The layer of compliance of reported data with legal and tax regulations cannot be forgotten either (tax offices can use the data for potential inspetions or checking activities).

Choosing the right supplier and tool for integration with KSeF – what to pay attention to / How to choose the optimal technological solution

The partnership between Ecovis and Pagero allows for a seamless integration of accounting and invoicing processes. This means that companies can manage their invoicing processes more efficiently and securely, reducing the risk of errors. By combining expertise and technology, Ecovis and Pagero have created an effective collaborative platform that can help companies of all sizes improve their operations by providing comprehensive, substantive and technical support for managing the company’s invoicing process.

Implementing standardised processes for handling e-invoices in compliance with local regulations is a challenge, so it is worth entrusting it to a trusted partner with experience in this area. When choosing an e-Invoice platform provider, pay attention to its experience in implementing projects in the tax technology area. One such provider is Pagero, which has been on the market for more than 20 years and has been operating in Poland since 2022.

Pagero offers the world’s largest open business network, with more than 14 million businesses already on board. It operates on more than 140 markets, ensuring that its customers comply with local regulations and exchange e-documents (e.g. invoices and orders) in agreed standards, structured formats and an agreed data scope. This network operates under the name Pagero Online. It streamlines day-to-day work while providing transparency and insight into e-Invoice processes in compliance with legislation. From day one of using Pagero Online, users can exchange invoices with other network participants. What is particularly important is that Pagero offers the possibility to communicate with companies using solutions other than Pagero, thanks to numerous inter-operator agreements.

It is important that the system provides additional functionality, such as data security, support for emergency and offline modes, and automation of decree processes. The large volume of data and the technological constraints associated with the processing of data by the National e-Invoice System (KSeF) require an effective solution to efficiently initiate the invoice dispatch process and evenly distribute traffic according to load and KSeF response times.

In short, when choosing the right tool to integrate with KSeF, it is worth being guided by the operator’s experience and scale, interoperability, speed of implementation, as well as the operator’s provision of support in areas not supported by KSeF. These include the handling of incoming invoices from foreign contractors and the ability to send invoices with attachments.

It is also important to start implementing the automated exchange of e-invoices as soon as possible, i.e. without waiting for KSeF. This will unleash the potential of automation and bring the benefits of e-invoice exchange much sooner.