Mandatory use of the National e-Invoicing System is imminent. To what extent will this invoicing revolution affect foreign entities?
According to the regulations, entities without a registered office or permanent establishment in Poland will not be required to use the KSeF. Furthermore, even if such entities have a permanent establishment in Poland, but this establishment is not involved in the delivery of goods or services for which the invoice was issued, they will also not be required to use the KSeF.
Against this backdrop, doubts may arise as to what constitutes a "place of business." Is VAT registration the determining factor? Or perhaps the shipment of goods from a warehouse in Poland? This issue has been the subject of consideration by national courts and the Court of Justice of the European Union for some time. However, with the upcoming entry into force of the regulations concerning the National Securities and Exchange Commission, it has become relevant again.
In its rulings, the Court of Justice of the EU has emphasized the need for technical and human resources. For example:
- A property rented in a Member State does not constitute a fixed establishment if the owner of that property does not have his own staff to provide services related to the rental (judgment of 3 June 2021, C-931/19, Titanium Ltd),
- A company established in one Member State does not have a fixed establishment in another Member State because it has a subsidiary there which, under agreements, provides it with technical and human resources through which it provides, on an exclusive basis, marketing, regulatory, advertising and representation services that may have a direct impact on sales volume (judgment of 7 April 2022, C-333/20),
- In order for a service provider to be deemed to have a "fixed establishment" within the meaning of Article 9(1) of the Directive, it is sufficient that he has "in a Member State either his own staff or an organisational structure which is sufficiently permanent to provide a framework within which contracts can be concluded." (Judgment of 17 July 1997, C-190/95)
This issue was also developed by Polish administrative courts, e.g.:
- A fixed establishment should have sufficient resources and resources to be able to provide the services it sells. Only then can it be considered a fixed establishment for the services sold (Supreme Administrative Court judgment of 3 October 2019, file no. I FSK 980/17).
- To establish a permanent establishment in a given country, it is not necessary to have your own human and technical resources. However, the taxpayer must have comparable control over its human and technical resources based on the requirement of sufficient permanence of the establishment. (Judgment of the Regional Administrative Court in Gliwice of 28 July 2020, file reference I SA/Gl 141/20)
- A permanent place of business is where an entity has human resources, technical resources, and infrastructure enabling it to conclude contracts and make management decisions. Furthermore, these resources and infrastructure must be characterized by a certain degree of permanence and enable the independent provision of services (judgment of the Regional Administrative Court in Warsaw of 26 June 2009, file no. III SA/Wa 110/09).
As it follows from the above, if a foreign entity does not have infrastructure or employees in Poland, or does not supervise them under an agreement with another entity, it will not have a permanent place of business and, therefore, will not have to use the mandatory KSeF.
Issuing invoices to foreign entities without a permanent establishment in Poland does not, however, exempt the invoice issuer from the obligation to use the KSeF system. They are required to issue a structured invoice. Delivery, however, occurs outside the system, in a manner agreed upon with the foreign counterparty.
Having a permanent place of business, or not, is therefore important both for the foreign entity itself and its Polish contractors.
Foreign entrepreneurs who have doubts as to whether their permanent place of business is in Poland may resolve this doubt by applying for an individual tax ruling.
PS. According to Friday's announcement from the Ministry of Finance, the mandatory KSeF will not come into force in 2024. However, no new date has been announced. We will keep you informed of any changes.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of January 22, 2024
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