VAT

Although the law introducing the mandatory National System of e-Invoices (KSeF) for most taxpayers will generally come into force as of July 1, 2024, as an exception, some of the provisions are already in force as of September 1 this year. Given that these provisions regulate important issues from the point of view of correct documentation of transactions in terms of, among other things, the issuance of correction invoices and advance payment invoices, taxpayers should already familiarize themselves with the changes.

The VAT treatment of so-called gratuitous benefits for private purposes of employees still raises various controversies. In practice, it happens that taxpayers who have doubts in this regard decide to “simplify” by both deducting VAT from purchase invoices and charging this tax on the gratuitous transfer of purchased services to employees. In the ruling in question, however, the SAC disagreed with this approach proposed by the taxpayer.

The National e-Invoice System is to become mandatory as of July 1, 2024. The advanced legislative stage of the government’s project indicates that this deadline seems realistic. The above means that entrepreneurs have less than a year to prepare for the upcoming revolutionary changes. Given that fulfilling KSeF-related obligations requires a significant commitment, taxpayers should be aware that, counter-intuitively, they do not have much time to begin the process of implementing KSeF in their organization. Please find below a summary of the most important issues to consider as part of this process.

A structured invoice is currently one of several available forms of documenting business transactions (in addition to paper invoices and electronic invoices). A structured invoice is considered to be an invoice issued using the National e-Invoice System (KSeF) with an assigned unique number identifying the invoice in the system (the so-called KSeF number). The KSeF number consists of 36 characters and is assigned automatically by the system.

According to the current version of the draft law of June 16, 2023, on amendments to the Law on Value Added Tax and amendments to certain other laws, mandatory e-invoicing will come into effect on July 1, 2024, and for taxpayers exempt from VAT by subject or object on January 1, 2025.

The requirement to mark a visualized structured invoice, e.g. either in PDF format or to paper, with a verification code is another of the new obligations to be imposed on VAT taxpayers in connection with the planned introduction of the mandatory KSeF. Marking the visualization of an invoice with such a code will make it possible, in particular, to verify that a given invoice was issued in KSeF and that the data on it is correct.

As a result of the planned introduction of mandatory KSeF, taxpayers will not only be subject to new obligations but, at the same time, if they fail to comply with some of them, they will face negative financial consequences.

On April 27, 2023, the CJEU issued a judgment in Case C-677/21 (Fluvius Antwerpen vs. MX) concerning the VAT taxation of illegal consumption of electricity by an individual. In the case under review, the distribution system operator, after discovering the non-contractual consumption of energy, issued an invoice for the supply of electricity to the aforementioned individual containing VAT. The amount due on the invoice was calculated on the basis of the actual energy consumption of this person based on the metered meter.