Mandatory e-invoices for all companies since 2025 – the end of paper invoices

Introduction National e-Factur strategy (KSeF) is simply a milestone in digitization of the Polish economy. From January 1, 2025 All companies, including those exempt from VAT, will be obliged to issue invoices only in electronic form via KSeF. This means the definitive end of conventional paper invoices and those sent by email in PDF format.

Why was KSeF introduced?

The main nonsubjective of KSeF is to sealing the taxation system and increased transparency of transactions. Electronic invoicing aims at:

• Shortening paper circulation time: Process automation allows faster processing of invoices.
• Reduction of errors: The strategy automatically verifies the correctness of the data, reducing the hazard of errors.
• Savings: Elimination of costs related to printing and storing paper documents.

Who's the duty?

From July 1, 2024 the work to usage the KSeF will cover all VAT taxable persons. From January 1, 2025 will be extended to exempt taxable persons, including tiny and medium-sized enterprises. This means that any entrepreneur will gotta comply with the fresh rules.

How does KSeF work?

KSeF is simply a platform for issuing, receiving and archiving electronic invoices in a structured XML format. The process is as follows:

1. Issue of an invoice: The entrepreneur creates an invoice in his accounting strategy in a format compatible with KSeF.
2. Message to KSeF: The invoice is sent to the strategy where it is verified.
3. Identifying information: After affirmative verification, the strategy gives the invoice a unique number.
4. Making the recipient available: The recipient can download the invoice straight from KSeF.

Benefits for entrepreneurs

Moving to e-invoicing brings many benefits:

• Faster VAT reimbursement: Entrepreneurs utilizing KSeF can number on a reduced VAT refund date from 60 to 40 days.
• Easier control: taxation authorities have current access to invoices, which may reduce the number of checks in companies.
• Security: Electronic invoice archiving eliminates the hazard of their failure or destruction.

Challenges and controversy

Despite many advantages, the introduction of mandatory e-invoicing raises any controversy:

• Implementation costs: tiny companies may face financial difficulties in adapting their systems to KSeF.
• No infrastructure: Not all entrepreneurs have the right equipment or software.
• Training: The request to train staff to operate the fresh system.

How to prepare?

In order to make a smooth transition to e-invoicing, entrepreneurs should:

1. Update Software: guarantee that accounting systems are compatible with KSeF.
2. Train employees: supply appropriate training for those liable for issuing invoices.
3. Test the system: usage the transitional period to test KSeF in practice.

Penalties for non-compliance

Failure to comply with fresh regulations may consequence in sanctions:

• Financial penalties: For not issuing an invoice in KSeF, penalties are provided for up to 100% of the value of the taxation shown on the invoice.
• Settlement problems: invoices issued outside the strategy may be considered invalid, which will affect the anticipation of deducting VAT.

The introduction of mandatory e-invoicing since 2025 is simply a crucial change in the Polish taxation system. Although there are any challenges, the benefits of digitising accounting processes are indisputable.