Central Register of Invoices and Central Database of Invoices in Poland – Polish e-revolution from 2022

What is the Central Register of Invoices and the National e-Invoice System

Poland as the fourth country of the EU countries decided to introduce the Central Invoice Register as another mechanism to prevent fraud against VAT. The Central Invoice Register is also known as the Central Invoice Database or the National e-Invoice System. It is a system that brings together all the invoices issued by entrepreneurs. It was established in order to tighten the tax system and prevent tax fraud. The Polish National e-Invoice System began its operation on 1 January 2022 under the Act of 29 October 2021 amending the Act on Value-added Tax and certain other acts (Journal of Laws of 2021, item 2076). The National e-Invoice System (NeIS) allows structured invoices to be issued and made available. On the basis of Art. 106nb of the Act on Value-added Tax of 11 March 2004, NeIS can be used by taxpayers, entities indicated by the taxpayer (e.g. an accounting office), enforcement bodies specified in the Act on Enforcement Proceedings in Administration of 17 June 1966 and court bailiffs performing enforcement actions within the meaning of the provisions of the Code of Civil Procedure in cases indicated in Art.106c of the VAT Act, natural persons indicated by such entities, natural persons indicated in the notice on granting or withdrawing the right to use the National e-Invoice System to whom the taxpayer or entities referred to in Art. 106c of the VAT Act have granted the right to use this system, entities other than listed, indicated by natural persons using the National System for e-Invoices, if the right to indicate another entity results from the rights granted to such natural persons.

Tasks and aims of the Central Invoice Register

As mentioned above, the main tasks of the Central Invoice Register are to prevent tax fraud and to tighten up the tax system. By increasing the transparency of the invoicing process, it will be possible to detect VAT fraud, especially in the form of ‘carousel fraud’, and thus to increase the rate of VAT collection. In the long term, the effects of the introduction of the Central Register of Invoices will include a reduction in accounting costs for companies through the introduction of electronic, structured invoices and the absence of the need to archive them, an increase in the confidence of citizens in state bodies and a reduction in the nuisance of tax inspections for companies. According to the justification of the bill introducing the National e-Invoice System, it will increase the competitiveness of the Polish economy against other European economies, which do not have such a solution in their legal systems. Moreover, e-invoices will save paper, and thus protect the environment. Faster VAT refunds will also improve the financial liquidity of small and medium-sized enterprises.

What is a structured invoice?

A structured invoice is one of the three possible ways of issuing an invoice, besides the traditional (paper) invoice and the electronic invoice. It is characterised by the fact that it is issued by the taxpayer using NeIS and has a number identifying it in this system. The recipient must give his consent to receive an invoice in this form in the same manner as he does to receive an invoice in electronic form. If the recipient does not give such consent, the issuer can still issue a structured invoice in the system, but is obliged to deliver it to the recipient in another agreed way. It is possible to correct a structured invoice by means of a correction invoice with the status of a structured invoice, but in addition to the usual characteristics of a correction invoice, it should include the identification number of the invoice being corrected. Currently, this is one form of invoice alongside paper and electronic invoices. This solution is not currently obligatory, but according to the government’s plans, the issuing of structured invoices is to become mandatory at the beginning of 2023.

Advantages of issuing structured invoices

The solution in the form of issuing structured invoices, according to the project proponents, will make it possible to take advantage of tax preferences proposed together with the same project regardless of the consent of the invoice recipient, i.e. the 40-day tax refund deadline and the settlement of an in minus correction for the period in which the correcting invoice was issued. This means that money from input tax then refunded due to an in minus invoice correction will reach the issuer faster than before. Structured invoices are to be stored in a system operated by the Polish Ministry of Finance for a period of 10 years, which means that there is no need to archive paper or electronic invoices and no need to issue duplicates in the event that the recipient loses an invoice delivered by a means other than NeIS – in which case the recipient applies to the issuer for a re-sending of the same invoice. Correction notes, however, can only be issued outside NeIS, under the current rules. NeIS has been based on an authorisation model, so the person operating the system will need to be authorised. Thanks to NeIS, the issuer of the invoice will be sure that the document has reached the recipient. The taxpayer who issues the VAT invoice will also have fewer obligations due to the standardisation of the invoice template, which will facilitate mutual settlements and accounting. Moreover, the taxpayer who issues an invoice using NeIS will not have to send the Unified Invoice Control File (JPK_FA) at the request of the tax authorities, because the data will be available to the authority ex officio in NeIS. Thanks to NeIS, tax inspection authorities will be able to carry out inspections much faster, as they will have access to invoices issued by companies. This will also tighten up the system for collecting VAT. Issuing structured invoices also has the advantage of making it possible to automate accounting processes, while reducing the number of errors caused by the human factor. By standardising the form of the invoice and the fact that it is only available in electronic form, it is possible to process the data contained in it much faster using a computer. The process of invoicing, processing and accounting can thus be faster and more efficient, while at the same time being cheaper due to fewer people being needed to carry out these processes. At the same time, the transparency and automation of invoice processing will allow tax offences to be caught more quickly, reduce the time taken for audits and reduce the involvement of entrepreneurs during audits.

Security issues

However, this solution raises controversies in terms of the security of the information sent. The Ministry of Finance assures that invoices sent to NeIS will be protected by numerous IT safeguards. Moreover, the system will be accessible to a limited number of people, who will only be able to access it after a National Tax Administration employee has been granted authorisation. Doubts about the security of both contractor data and transaction details are well-founded, as they contain sensitive data for both individuals and the entire economic cycle, and in the event of a leak, businesses could suffer damage. Collecting all invoices on one server without archiving them in another location in the event of a breakdown could result in the loss of all invoices, making it impossible for the tax authorities to carry out audits and calculate tax obligations. Believing in the assurances of the Ministry of Finance, however, the data stored in NeIS will be adequately protected.

Test access to NeIS

From October to December 2021, the NeIS system was made available to taxpayers on a test access basis. The purpose of granting such access was to encourage entrepreneurs to use e-invoices while they are still considered an optional form of invoicing. It was also intended to allow IT systems to be adapted to the implementation of NeIS. Currently, the website given below provides the necessary information on NeIS.

Useful links:

https://www.podatki.gov.pl/ksef/

https://www.podatki.gov.pl/ksef/strefa-testowa-ksef/

Sources:

1. Ustawa z dnia 29 października 2021 roku  o zmianie ustawy o podatku od towarów i usług oraz niektórych innych ustaw (Dz. U. z 2021 r. poz. 2076)
2. Rozporządzenie Ministra Finansów z dnia 27 grudnia 2021 r. w sprawie korzystania z Krajowego Systemu e-Faktur
3. https://www.podatki.gov.pl/ksef/
4. https://www.podatki.gov.pl/ksef/strefa-testowa-ksef/
5. https://podatki.gazetaprawna.pl/vat/artykuly/8314767,ksef-krajowy-system-e-faktur-centralny-rejestr-baza-od-kiedy.html
6. https://poradnikprzedsiebiorcy.pl/-krajowy-system-e-faktur
7. https://www.pit.pl/efaktura/centralny-rejestr-faktur-co-przedsiebiorca-wiedziec-powinien-1005849
8. https://poradnikprzedsiebiorcy.pl/-ksef-czyli-krajowy-system-e-faktur
9. https://www.pibr.org.pl/pl/aktualnosci/1631,Rada-Ministrow-przyjela-projekt-zmian-do-ustawy-VAT-wdrazajacej-Krajowy-System-e-Faktur-KSeF-
10. https://www.prawo.pl/podatki/bezpieczenstwo-danych-z-faktur-o-sprzedazy-w-krajowym-systemie-e,510097.html
11. https://www.prawo.pl/podatki/e-faktura-i-centralny-rejestr-faktur-kolejne-narzedzia-e,507268.html
12. https://www.podatki.biz/artykuly/e-faktura-to-kolejny-krok-w-kierunku-automatyzacji-procesow-ksiegowych_16_49239.htm