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Polish law obliges foreign entities that have a permanent place of business in Poland (Fixed Establishment - FE) to issue structured invoices in the National e-Invoice System (KSeF) from 1 July 2024. However, this does not apply to taxpayers who have a permanent place of business in Poland but issue invoices that are not related to it.
How does the National e-Invoice System (KSeF) affect the activities of foreign entities in Poland?
KSeF is a Polish IT system that is used to issue, receive, and store structured invoices (up to 10 years). The system makes it possible to automate the entire process related to carrying out tax audits. This includes: to shorten their duration and reduce the level of involvement of controlled entrepreneurs in the entire process.
A permanent place of business means any place - other than the taxpayer's place of business - which is characterized by sufficient stability and an appropriate structure in terms of human and technical resources to enable the receipt and use of services provided for the own needs of that permanent place of business.
The issue of a permanent place of business is the subject of numerous interpretations and judgments. The content of the definition regarding the rules for establishing a permanent place of business still lacks clear premises that would allow it to clearly state the existence or non-existence of an FE for a foreign entity in Poland.
Verification of the premises leading to the creation of FE is important in connection with the introduction of obligations to issue electronic invoices from 1 July 2024. Taking into account these changes and the need to issue structured invoices, each foreign entrepreneur who performs activities subject to VAT in the territory of Poland should determine the risk of establishing a permanent place of business in Poland.
UPDATE!
On 26 April 2024, the Polish Ministry of Finance postponed the effective date for mandatory invoicing in the National e-Invoicing System (KSeF) to 2026. From 1 February 2026, KSeF is going to be obligatory for entities whose value of turnover in the previous year exceeded the amount of PLN 200 million, and from 1 April 2026 – for all entrepreneurs.
Foreign entities that have doubts whether their activities lead to the existence of FE in Poland should conduct a detailed analysis of the economic processes in a given enterprise or apply to the Director of the National Tax Information with a request for an individual interpretation in this respect.
The scope of support of RSM tax advisors in the proper implementation of e-invoices in Poland
RSM Poland specialists have practical experience in tax consulting, allowing us to guide the company through all stages of the process related to determining the existence of a permanent place of business in Poland:
- we will analyze whether the activities performed by a given foreign entity lead to the establishment of a permanent place of business in Poland;
- we will apply to the Polish tax authorities for an individual interpretation;
- we will support foreign entities in registering them for VAT purposes in Poland;
- we will support foreign entities in the invoicing process via the KSeF system;
- we will help you fulfill your obligations under VAT Compliance;
- we will contact tax authorities and, representing our clients, we will provide officials with information necessary in the event of inspection activities, tax inspections and tax proceedings.
Polish tax offices approach the issue of FE very strictly, therefore activities aimed at establishing the existence of a permanent place of business in Poland cannot be underestimated by foreign entrepreneurs. Entities that do not correctly issue structured invoices via KSeF will be subject to penalties:
- up to 100% of the VAT amount shown on this invoice;
- up to 18.7% of the total amount due indicated on this invoice in the case of an invoice on which no tax is indicated.
If you want to avoid problems with tax administration authorities, write to our expert and find out how we can help your company.
