Single Use Plastic Directive
If tax rate changes are also becoming more visible today, tax rate changes pertaining to a distinctly environmental agenda are also becoming a more integral feature in the regulatory framework across Europe.
Poland is the latest country to mark a Single-use Plastic directive (SUP) as part of its wider fiscal infrastructure- which, as the name suggests, is motivated to prevent the use of single-use plastic. The rules are expected to have wide-reaching effects, with the Act effectively banning specific types of plastic on the market. In effect, a ‘plastic tax’ will be introduced for entities who sell single-use products to consumers. Fees for contravening these rules are expected. The Act is expected to take effect from 1 July 2024.
Tungsten Network will review is obligations in respect of the tax. The Act has been passed in Parliament, and the president signed the law implementing the EU directive on single-use plastic in April 2023.
Slim 3 reforms
Poland’s fiscal trajectory in 2022 was a busy one as it frequently altered its tax rates in an era of economic uncertainty. This, along with other fiscal initiatives, were condensed into a package what is known as the ‘SLIM’ package. Poland is currently in the midst of implementing ‘SLIM 3’.
The SLIM 3 package was finally approved in March 2023- but its implementation date has now been delayed to July 2023.
Slim 3, as expected, is extensive, covering the following issues:
- The lack of need for an invoice to settle VAT
- Further VAT exemptions
- Further transparency with respect to VAT bindings
- The option to transfer funds deposited in VAT accounts of VAT group members
- Reduction of certain VAT penalties
SLIM 3 strives for the simplification of fiscal practices in the country, with the aim of creating a process that is streamlined, accessible and simple to facilitate.
The Polish government has already referred to a SLIM 4 package
, where known details in relation to the same are sparse. Tungsten Network will follow developments in relation to the same, ensuring that any VAT rate changes are incorporated as part of our e-invoicing solution.
Temporary introduction of the reverse charge
Due to the introduction of the split payment mechanism in 2019, Poland has largely not made as much use of the reverse charge to the same extent as its European counterparts. However, Poland is now reversing this trend.
On a temporary basis, the reverse charge will be permitted on the following domestic transactions:
The changes are complex. Tungsten Network would recommend consulting a tax advisor for further information in respect of these changes if required.
The reverse charge is viewed as an effective measure to combat VAT fraud by essentially placing the responsibility to pay VAT on the buyer rather than the supplier. The VAT in the Digital Age (ViDA) proposal also has proposed some intriguing changes in respect of the reverse charge. You can read more about this, and the proposal in general, here.
- Supplies of gas;
- Supplies of electricity;
- Provision of services for the transfer of greenhouse gas emissions allowances
New e-invoicing draft legislation
The Polish government has published new draft regulations relating to the National e-Invoicing System, also referred to as the Krajowy System e-Faktur (KSeF).
The draft regulations represent both a confirmation of the elements contained in the draft legislation published in December 2022, as well as some additional announcements.
The March 2023 draft legislation confirms the following (while being cognizant that these proposals are still in draft only):
The link to the draft legislation can be accessed here.
We are expecting a final version of the legislation in the summer of 2023. Tungsten will analyse these once available and consider the effect these will have on our e-invoicing solution.
- Obligatory KSeF obligations will commence from 1 July 2024
- B2C customers are excluded from KSeF obligations
- The legislation cites the possibility to issue e-invoices outside KSeF in cases where the taxpayer is unable to issue them in KSeF for any reason other than system failure, with the obligation to send them to KSeF no later than the next business day
- Transactions exempt from VAT, simplified invoices and invoices issued through cash registers will see their e-invoicing obligations via KSeF commence from 1 January 2025
- The extension of the ‘validity’ of the exchange rate on invoices issued in foreign currency has been discussed - impacted invoices should be sent to KSeF no later than the day after the date of issue
- The elimination of correction notes and correction invoice proposals has also been proposed in the draft legislation
- Sanctions will take effect from 1 January 2025
- A requirement to retain either the KSeF number or the collective identifier on the bank transfer for payments for invoices issued in KSeF is also included
- Clarification of the scope of the obligation of additional marking of structured invoices in case of their use outside KSeF, the event of KSeF failure, etc has also been provided
- Clarification has been provided that where a foreign taxpayer has a permanent place of business in Poland, but does not participate in the supply of goods / services for which the invoice was issued - these taxpayers are not obligated to issue invoices via KSeF
- Clarification that KSeF will also be used to accept structured invoices during the period of KSeF failure, system unavailability or inability to issue an invoice on the part of the taxpayer, is also included within the draft legislation.
National e-Invoice System (KSeF) – consultation conference
With the e-invoicing mandate in Poland gaining ascendancy, the Polish Ministry of Finance held a conference in February 2023 to discuss the upcoming amendments to the draft law introducing mandatory e-invoicing in Poland. The legislative process for this draft law is still ongoing and is expected to be completed in the summer of 2023.
You can refer to our recent post on the anticipated Polish e-invoicing mandate changes here.
The above changes have not been enacted yet, but more information on the outcome of the discussion at the conference has been published on the website of the Polish Minister of Finance, with the link directly below:
Tungsten is looking forward to clarifying the finalised scope of the e-invoicing requirements in Poland. We will review these once available and consider any resulting impact on our system.
New SLIM 4 2024 package announced
Poland is a compliant territory for Tungsten Network, and we regularly monitor tax rate changes in the country with a view to ensuring our solution supports valid VAT rates in the country. Tungsten recently commented on the anti-inflation shield 2.0 measures in Poland, established largely in response to rising inflation in the country. The measures within this included tax rate changes, which were constantly subject to fluctuation given the unpredictable economic position of both Poland and the wider European market.
Slim 4, a further set of tax measures, is similarly expected to churn further VAT compliance reforms in the country. No specific details as of yet have been announced as to the content of the package, but Tungsten will monitor any tax rate revisions that will be contained within it.
VAT/G(S)ST rate information
Revised tax rates
The Polish government, via Ordinance No. 28048/2022, has introduced the following VAT modifications:
VAT/G(S)ST rate information
Please refer to the Ordinance for further details.
- The goods subject to 0% have now been altered;
- Specific goods subject to the 8% VAT rate, including those relating to soil fertiliser and soil product supply and acquisition, were due to have the 8% VAT rate expire as of 31 December 2024. For now, this VAT rate expiry date has been removed.
E-invoicing mandate postponement in Poland
The Polish e-invoicing guidelines published at the end of 2022 confirmed a start date of 1 January 2024 for the Polish e-invoicing mandate.
The Polish Ministry of Finance has now confirmed a delay to the commencement of the e-invoicing mandate in Poland, to 1 July 2024.
It appears that there will be changes introduced to the scope of e-invoicing in Poland, including the obligation for exempt taxpayers to use the KSeF e-invoicing platform from 1 January 2025, as well as potential obligations relating to cross-border transactions.
We are expecting further details confirming the scope, alongside other changes, later this year. We will assess the new scope of the mandate, once confirmed, as well as any other changes introduced in the final publication of the changes and will be ready to support the new mandate in line with the revised timeframe of July 2024.
End of anti-inflation measures
2022 saw multiple countries deploy fiscal policies to reverse the adverse effects of inflation. While countries across Europe and globally continue to grapple with inflation, some countries are beginning to reverse their fiscal policies in this respect with a view to enhancing their economic position in 2023.
Tungsten has been following Poland’s anti-inflation measures closely for some months. Many of the fiscal changes enacted here ceased at the end of 2022.
This means that we can expect to see VAT rates return to their former rates, as seen prior to 1 February 2022, in line with the following:
VAT/G(S)ST rate information
However, as mentioned, some limited measures will remain. For example, we communicated last month that the zero percentage on basic foods will remain in place in Poland.
- Natural gas: from 0% to 23%
- Electricity: from 5% to 23%
- System heat- from 5% to 23%
- Motor fuels- from 8% to 23%
Draft regulations regarding the KSeF e-invoicing platform (mandate)
Tungsten has closely been following the e-invoicing mandate in Poland, as we look to support our suppliers and buyers in Poland with upcoming mandate in 2024.
The Polish government has published draft regulations relating to the upcoming e-invoicing mandate.
The draft regulations incorporate some significant details. Below is a high-level summary of the critical points contained within the Polish draft e-invoicing regulations:
- There is confirmation that the Polish e-invoicing mandate will commence on 1 January 2024. Tungsten will therefore work towards an implementation date of 1 January 2024 for the mandate and adapt our timeframes accordingly in line with any revised dates.
- E-invoicing will also be is mandatory for foreign entities with fixed establishment in Poland.
- Penalties for failure to comply with the e-invoicing mandate are outlined in the draft regulations.
- The draft regulations include a new obligation to mark invoices circulated outside the KSeF environment with a QR code.
- A new type of document- the ‘correcting invoice proposal’ - is expected to coincide with the start of the e-invoicing mandate and would apply when buyers request an amended invoice from a supplier.
- A collective identifier must be applied when at least two invoices are issued to one recipient.
The proposed changes outlined in the draft regulations are complex and Tungsten is currently analysing what this means for upcoming e-invoicing mandate and our plans to support it. Approval of the draft regulations is expected in the first quarter of 2023. We will review the finalised version once available.
- Certain VAT taxpayers subject to special procedures will be exempt from e-invoicing.
Anti-inflation tax measures
Tungsten has followed the anti-inflation measures deployed by the Polish government, which, as the name suggests, are a set of fiscal measures which serve as a direct response to rising inflation in Poland.
However, the proposed measures do underline the limitations of Member States in respect of some of the fiscal measures they can implement. The European Commission, for example, while agreeing to the zero-rating of basic foods as part of the package, has blocked the zero-rating of natural gas, fuels and fertilisers. This is owing to EU Directive rules, which cite that energy must be taxed to at least 5%.
While the basic foods rate was reduced to zero VAT early in 2022, it was initially envisaged that Poland would remove the zero VAT rate in January 2023. However, the Chancellery of the Prime Minister has confirmed on the Polish government website that the zero VAT rate on food products will continue until the middle of 2023.
With inflation still a primary concern for many European countries, we can expect to see multiple countries initiate similar measures over the coming months.
Update to KSeF Taxpayer Applications
On 20 October 2022, the Polish government released a test version of the KSeF Taxpayer Application. This test version incorporates elements of the feedback received during the testing period.
The Application includes several functionalities, including:
- Issuing and receiving invoices from KSeF
- Viewing invoices
It is hoped that the updates incorporated to the Taxpayer Application will lead to a more efficient and less cumbersome process for taxpayers.
KSeF and VAT groups
We have recently communicated about VAT groups in Poland. Poland permits the formation of VAT groups. These are advantageous for many reasons- one such reason being that transactions between members of the same VAT group are not subject to VAT. Moreover, VAT groups have the added benefit of less VAT-related administrative obligations for members within the group. The designated representative of the group is typically assigned responsibility for these commitments.
Poland has established a draft law which considers VAT groups much more sharply in light of the upcoming Polish e-invoicing mandate. Much in the same way as a member of a VAT group is afforded responsibility to carry out other VAT-related obligations, a similar process will be conferred on a designated representative of a VAT group, which allows certain members rights to manage the B2B e-invoicing platform, the KSEF.
Tungsten will follow the publication of the draft law.
Anti-inflationary shield 2.0
Poland introduced the anti-inflation package to reduce the VAT burden on taxpayers. We communicated last month these measures had been extended until 31st October 2022.
The Council of Minister has now extended the measures to the end of the year.
Extension of VAT rate reductions
Anti-inflationary shield 2.0
VAT/G(S)ST rate information
was introduced to reduce the VAT on certain products and therefore reduce the burden on taxpayers considering recent inflation, which continues to spiral unabated across Europe.
The initial timeline for the reduced VAT rates in Poland within this initiative was due to expire on 30 June 2022. This has now been extended to 31 October 2022.
Introduction of new VAT groups delayed
The introduction of new VAT groups in Poland was expected to come into effect on 1st
July 2022. However, there are indications that the applicable legislation will not be enacted in time.
It is envisaged that the introduction of new VAT groups in Poland will now take place from January 2023.
If so, this may affect the changes to the VAT-R form in Poland referred to below.
New VAT-R form
VAT/G(S)ST rate information
There have been some significant changes on the VAT-R form in Poland.
The VAT-R is the form necessary to initiate VAT registration in Poland. Further to the two changes above, the form will now include the option to indicate that a particular taxpayer is part of a VAT group. The form also allows taxpayers to select whether financial services are taxed, or whether they are exempt from taxation.
An English version of the form is also available.
The new form came into effect from 1 July 2022. A transitional period has allowed taxpayers some flexibility and meant that the previous version could be used until 31 June 2022.
E-invoicing mandate delay
Last month we communicated around the derogation granted to Poland by the European commission to mandate e-invoicing in the country
. We expected the Polish mandate to be enforced through the course of 2023.
The European Council has revised the date from which the derogation applies to 1st
January 2024. This was approved by the European Council on 17 June 2022. This means Poland, at the earliest, can start mandating e-invoicing in the country from 1st
January 2024. The derogation is effective until 31 March 2026.
The legislation has now been published in the official Journal of the EU Union and the derogation is not legally binding.
Tungsten Network is preparing to be ready for the Polish mandate and we will continue to update you on our progress.
Derogation from European Commission to mandate e-invoicing
Poland has now received the derogation from the European Commission to mandate e-invoicing in the country.
The derogation is required by each EU Member State if they wish to mandate e-invoicing in their respective country, as formal permission is needed to deviate from the right to receive an invoice in paper format (as per the EU Council Directive 2006/112/EC of 28 November 2006).
This effectively means that Poland can now implement mandatory e-invoicing in the country.
E-invoicing in Poland is expected to be enforced from April 2023. A firm date has not yet been set.
Tungsten Network will communicate when a firmer date is communicated.
VAT assistance to Ukraine
The past 2 years have demonstrated a direct correlation between significant world events and the fiscal measures countries enact. This has been particularly notable with the coronavirus pandemic but is also becoming more apparent with recent events in Ukraine.
We’ve previously seen countries such as Romania taking measures to ensure that all goods and services provided to persons affected by the war will not be subject to VAT.
Poland is adopting multiple similar measures. The Polish National foundation of Tax Advisors has stressed that no public associations will benefit from any tax relief on aid from Ukraine.
Poland is also considering the revision of a current decree, which would mean a 0% VAT rate would be applied to free-of charge deliveries of goods (or a supply of services) which would be aimed at assisting victims of Ukraine’s armed conflict.
This would affect all deliveries / supplies made between 24 February 2022 and 30 June 2022, if approved by the Polish Parliament.
We can expect to see many countries adopting similar measures, particularly bordering countries in close proximity to the conflict.
Taxation of financial services
The Polish Ministry of Finance has permitted the taxation of any financial services that businesses provide from 1st January 2022.
The main effect of this is that many businesses will be able to deduct VAT from goods / services purchased, thus providing a financial benefit. Taxation of financial services is optional rather than mandatory.
Financial services for retail clients are still exempt- meaning that any consumers should not see an increase in prices.
Extension for split payment mechanism
Poland introduced the split payment mechanism in 2019.
The split payment mechanism is where VAT is not paid together with the net amount into the applicable bank account. Rather, the VAT is placed into a separate dedicated bank account for the VAT.
In November 2019, Tungsten Network enabled a feature allowing suppliers to indicate whether the invoice is subject to the split payment mechanism in Poland.
The European Commission had granted Poland the right to mandate split payments until the end of February 2022. However, the European Commission has granted permission to extend the split payment mechanism beyond 1st March 2022, for a period of 3 years.
In many respects, the split payment mechanism has the same underlying aims as the upcoming Polish e-invoicing mandate- to reduce the VAT gap, as the mechanism provides a means of certainty that the VAT has been paid. The extension of the split payment mechanism therefore serves to further reduce the VAT gap in Poland.
Introduction of Polish VAT groups
With the upcoming e-invoicing mandate expected during 2023 and new recent SAFT-requirements, Poland is overseeing a busy period in the re-structuring of its fiscal operations.
Another significant change being introduced in Poland is the introduction of new VAT groups.
Poland will permit the formation of VAT groups in Poland- these are groups which will typically be formed based on financial, economic or organisational ties. Taxpayers can be based in Poland or abroad- but if the latter, it is expected that they will conduct their business through a branch in Poland. Groups must be formed for a minimum of 3 years.
A representative of the group will perform any VAT- related responsibilities. Any transactions between the members of the same VAT group will not be subject to VAT- although transactions with entities outside the VAT group will in effect be deemed to be transactions with the entire group.
This comes with some benefits- transactions between members of the same group will not be subject to VAT and the corollary of reduced administrative-related duties relating to VAT.
These regulations are expected to come into effect on 1 July 2022.
Publication of new version of the JPK FA structure
The Polish Ministry of Finance has this month published the new JPK_FA structure. Alongside the new structure, an information brochure has been published, outlining the main changes that have been introduced.
The new structure can be located on the Polish National Tax Administration website.
Reduction in VAT rates for food and energy
VAT/G(S)ST rate information
There is a recurring trend across Europe this winter as energy, electricity and heating VAT rates come more sharply into focus- a response to rising inflation on the continent, as well as the effects of the Covid-19 pandemic. Poland is no exception to this and the Sejm- the Polish Parliament- has responded to rising inflation with proposals to amend the VAT Act. These measures are part of a programme referred to as ‘anti-inflation shield 2.0’, which, as the name suggests, is a direct response to rising inflation in Poland.
• Basic food and beverages currently subject to the 5% VAT rate will be subject to 0% VAT;
• Goods used to drive internal combustion engines (diesel oil, biocomponents constituting self-contained fuels, motor gasoline, natural gas (wet), liquefied LPG) – currently subject to the 23% VAT rate – will be taxed at the 8% VAT rate;
• Fertilizers, plant protection chemicals, horticultural soil and other means of supporting agricultural production – currently subject to the 8% VAT rate – will be taxed at 0% VAT;
• Natural gas (CN 2711 11 00 or 2711 21 00) – will be taxed at 0% VAT;
• Electricity (CN 2716 00 00) – will be subject to VAT 5%;
• Heat energy – will be subject to VAT 5%.
Tungsten Network’s portal accommodates these rates.
Regulation of e-invoicing
E-invoicing in Poland became voluntary towards the end of 2021. To this effect, the Polish government has published a regulation on the use of the e-invoicing system. This regulation deals with several practical and logistical issues, including
• Authorisation required to use the National System of e-invoices;
• How authorisations can be granted, changed or withdrawn;
• How to authenticate entities using the National System;
• Structured invoice data, which will enable access to the invoice in the system
The link for this regulation can be found here.
While Tungsten Network is not supporting the voluntary phase, we are fully committed to supporting e-invoicing in Poland, when it is expected to become mandatory at a later date in 2023, which is yet to be confirmed.
New JPK EWP structure published
The JPK is a set of data which is generated from a business’ IT system. This usually contains information about business operations for a set period of time. In Poland, this is only sent in electronic form and has a very specific layout. It allows the exchange of important information between businesses and tax authorities.
A new version of the JPK was published on 1st January 2022. Inevitably businesses will need to adapt to the new version- and this will take time. To this effect, the tax authorities have indicated they will not demand the new version – JKP_EWP (3) until April 2022.
The new version accommodates two new tax rates (12% and 14%), which have been added to the optional list node.
The new version can be found on the National Tax Administration website.
Greater independence to decide VAT rates
VAT/G(S)ST rate information
Poland has recently announced it will be able to select its own VAT rates. There is a wait for this to be adopted but this is believed to be a formality only. This may result in several VAT rate changes in Poland. Tungsten has a big customer base in Poland and will ensure that any appropriate action is taken to implement any new tax rates.
We are very closely monitoring developments in Poland – on the back of some recent political unrest in the country, it is expected that there may be some significant changes upcoming in 2022 – we will keep you updated.
Logical structure of e-invoices published
The e-invoice logical structure is now available on the Central Repository of Electronic Document patterns on the ePUAP platform. This covers the following changes:
- descriptions of member country codes and currency codes
- the definition of the TAdres element, including adding a new TGLN type
- adding the TZnakowy20 element
- TNumerKSeF element definition
- the definition of selected character elements to the integer type
- entering the maximum number of occurrences of some elements, eg Transport, Shipment by update of descriptions of some elements, eg P_15, P_18A adding new grouping elements, e.g. Partial Payments, PlanDates, Agreements, Orders.
These are applicable from 1 January 2022. Note that the use of e-invoicing in Poland will remain voluntary until 01/01/2023.
National System of e-Invoices (KSeF)
We have previously written about the voluntary phase of the e-invoicing mandate in Poland, which is scheduled to start in January 2022. It is on course to become mandatory in January 2023.
The Polish Ministry of Finance has now started a pilot of the KSef, the Polish e-invoicing platform, and has invited any entities that develop invoicing software to test it. There is no official application process for this. All invoices issued during this pilot will be regarded as tests and have no legal effect.
Access to this trial version can be found via this link.
Law regarding structured invoices
Poland has passed a law regarding structured invoices.
This means that from 1st January 2022 the use of structured invoices will be voluntary. This may potentially become mandatory from January 2023.
JPK VAT structure
VAT/G(S)ST rate information
The JPK VAT file is a collection of data based on the information in a taxpayer’s IT systems needed for SAF-T reporting. This provides information around business operations for a given period of time. A new version of the JPK-VAT logical structure will apply from 1st January 2022.
The new JPK-VAT is a periodic filing document which combines the current JPK-VAT file, and monthly and quarterly VAT returns within one document. The Polish Ministry of Finance has been developing the draft version following tax consultations with entrepreneurs.
This updated structure can be found via the following link:
The updated structure will include all changes that enter into force during the period 1st July 2021-1st January 2022.
Postponement of voluntary mandate phase
The voluntary phase of the Polish national e-invoicing mandate has been delayed until January 2022. It was originally scheduled to be implemented in October 2021.
Poland and Brexit – waiver of requirement of fiscal representative for the UK and Norway
The Polish Ministry of Finance published draft tax legislation on 12th February, under which UK and Norwegian based companies will not be obliged to appoint fiscal representation in Poland.
This important decision is mainly due to adequate agreements for mutual assistance being in place between countries. These agreements arrange administrative cooperation and collaboration to fight against VAT fraud. The legislation comes into force retrospectively with an effective date of January 1, 2021.
Fast progress on “structured invoices’ programme
For some time now, Poland has been stating that it would implement their continuous tax controls regulation ahead of France. They seem to be making good progress.
The Polish Government Legislation Centre has published a draft law amending the VAT Act, introducing a model of ‘structured invoices’ to the local VAT system. The draft law is available for public consultation for a very short period in February. The expectation is that the law will come into force by October 1, 2021. It should be noted that, initially, invoice issuance and reception via the national e-invoicing platform (Krajowy System e-Faktur (KSeF) or National e-Invoicing System (NeIS)), will be voluntary and businesses can continue to use current formats, including paper, PDF and other e-invoicing formats. However, the government will reward early adapted with faster VAT returns. The system is expected to become mandatory by 2023.
NOTE: The Polish KSeF system strongly resembles the Italian Sistema di Interscambio – invoice issuance and reception will take place in the platform and an archiving function is available from the system.
Note that the draft law leaves room for more detailed regulation to be added by ministerial decree.
Looking at implementing e-invoicing via the National System of e-invoices (KSeF)
The Polish Ministry of Finance (‘MoF’) is looking into amending the VAT act by introducing the possibility of issuing electronic invoices next to the current paper and electronic invoices, via KSeF – the National System of e-Invoices. Next to the business benefits of e-invoicing (such as cost reductions, better transparency, and shorter payment cycles), there will be further advantages to the taxpayer such as a reduction of the deadline for VAT refunds from 60 to 45 days. The project is planned to commence in the first quarter of 2021. However, it seems that this system will be moved to mandatory usage later in 2022.