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On 1 January 2027, provisions introducing penalties for breaches of obligations relating to the National e-Invoicing System will take effect. Companies that have not yet implemented KSeF therefore have very little time left. In today’s article, we examine the position of foreign companies in this context. Do they also have to issue invoices in KSeF? Read on.
Provisions imposing penalties for breaches of the National e-Invoicing System rules, including failure to issue invoices in KSeF, start on 1 January 2027
We recently wrote about how everything indicates that provisions introducing penalties for breaches of obligations relating to the National e-Invoicing System will take effect as planned, from 1 January next year, in the article “No penalties for entrepreneurs breaching KSeF rules in 2027 either? A change in the Ministry of Finance’s approach to sanctions relating to the National e-Invoicing System”.
Despite earlier announcements of a possible postponement, suggestions expressed by the Minister of Finance himself on RMF FM radio as recently as April, no draft legislation changing the entry-into-force date of these sanctions had been published as of this article’s publication, and nothing indicates that such a draft is being prepared.
Taking this into account, from 1 January 2027, failure to issue a structured invoice using KSeF despite an obligation to do so will carry a penalty of up to 100% of the VAT shown on the invoice issued outside KSeF, or, for an invoice without separately stated VAT, up to 18.7% of the total amount due shown on that invoice.
Will foreign companies also face this penalty?
Foreign entities and KSeF: when and to whom KSeF does not apply
Paragraph 2 of Article 106ga of the VAT Act, which concerns the obligation to issue structured invoices using the National e-Invoicing System, expressly states who is not subject to this obligation. These include:
- Taxpayers with neither their business establishment nor a fixed establishment in Poland;
- Taxpayers without their business establishment in Poland who have a fixed establishment in Poland, but that fixed establishment does not participate in the supply of goods or services for which the invoice was issued.
To determine whether a foreign company must issue invoices in KSeF, the answers to two questions are therefore crucial:
QUESTION 1: Does the company have a fixed establishment in Poland?
A negative answer means that the company does not have to issue invoices in KSeF.
A positive answer means that question 2 must be answered.
QUESTION 2: Does the foreign company’s fixed establishment in Poland participate in the supply of goods or services for which the invoice was issued?
A negative answer again means there is no obligation to issue those invoices in KSeF.
A positive answer generally means an obligation to invoice through the National e-Invoicing System arises.
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The problem with defining a “fixed establishment” in the context of KSeF obligations: KSeF and foreign invoices
Although the above seems fairly simple and clear, practice shows that this is often not the case.
This is due, among other things, to the absence of a definition of “fixed establishment” in the Polish VAT Act and other domestic tax acts.
The definition is instead contained in Article 11 of Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax. It clearly indicates that a fixed establishment should be characterised by:
- “A sufficient degree of permanence”, and
- “A suitable structure in terms of human and technical resources” enabling it to receive and use services for its own needs and to provide services.
The emphasis is therefore on specific characteristics also reflected in CJEU and domestic case law. Most importantly for KSeF, these characteristics were also detailed by the Ministry of Finance in its tax explanations of 28 January 2026 concerning the rules for determining a fixed establishment in Poland for invoicing through the National e-Invoicing System.
The explanations state that a fixed establishment exists when all the following conditions are met:
- The service provider’s human and technical resources are located there, meaning a number of personnel and technical resources appropriate to the business profile, including machinery, equipment, operating systems and so on;
- Those resources have a structure allowing services to be provided; in this context, the Ministry of Finance particularly emphasises the extent of the establishment’s independence from the company’s head office and the fact that the taxpayer should be able to conclude contracts concerning ordinary management there when necessary;
- The place where those resources are located has sufficient permanence to provide services; according to the Ministry, a fixed establishment should demonstrate a degree of commitment allowing the activity conducted there to be regarded as neither transient nor temporary.
If, despite the above, a foreign company is unsure whether it has a fixed establishment in Poland, it is worth applying for an individual tax ruling. Such a ruling will not only resolve doubts concerning KSeF obligations but also provide protection in the event of an inspection.
Interested in this article? Explore our tax advisory services and see how we can help:
Summary
Does a foreign company have to issue invoices in KSeF? Foreign entities and foreign invoices in KSeF
A foreign company generally does not have to issue invoices in KSeF if it has no fixed establishment in Poland.
If it does have one, the KSeF obligation arises, but only when that fixed establishment participates in the supply of goods or services documented by the invoice.
Because the Polish VAT Act and other domestic tax acts do not define “fixed establishment”, and the definition at EU level is fairly general, applying for an individual tax ruling is often recommended for foreign entities.
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