More and more taxpayers are implementing the storage of invoices only in electronic form. What do tax regulations say about this?
VAT
According to Article 106m sec. 1 of the Polish VAT Act: “The taxpayer shall determine the method of ensuring the authenticity of origin, integrity of content and legibility of the invoice.” On the other hand, according to Article 112a of the same Act: “Taxpayers shall store:
1) invoices issued by yourself or on your behalf, including invoices issued again,
2) invoices received, including invoices reissued
3) broken down into settlement periods, in a way that ensures their easy retrieval and authenticity of origin, integrity of content and legibility of these invoices from the moment of their issuance or receipt until the expiry of the limitation period for the tax liability.”
Taking into account the above provisions, it should be pointed out that from the perspective of VAT, it is crucial that the stored invoices meet the above requirements, i.e. meet the characteristics set out in Article 106m sec. 1 and Article 112a of the Polish VAT Act. Therefore, all methods (procedures) of storing invoices in electronic form are permissible, provided that they must guarantee the authenticity of the origin of the invoices, their integrity and legibility.
Thus, the provisions of the VAT Act do not prevent the receipt of invoices in paper form from being scanned and then disposed of.
The correctness of this approach has been confirmed by tax authorities in numerous individual interpretations, for example in the advance tax ruling of the Director of the National Tax Information of the date of:
- 7 February 2022 (file reference number 0111-KDIB3-3.4012.637.2021.2.MAZ);
- 1 June 2022 (file reference number 0111-KDIB3-3.4012.155.2022.2.MAZ);
- 19 March 2021 (file reference number 0112-KDIL1-1.4012.10. 2021.2.MB).
CIT
According to Article 9 sec. 1 of the Polish CIT Act: “taxpayers are obliged to keep accounting records, in accordance with separate regulations, in a manner that ensures the determination of the amount of income (loss), the tax base and the amount of tax due for the tax year, as well as to include in the records of fixed assets and intangible assets the information necessary to calculate the amount of depreciation write-offs in accordance with the provisions of Articles 16a-16m.”
On the other hand, the regulations of the Polish Accounting Act indicate that the basis for entries in the accounting books are accounting documents confirming the performance of a business operation. Accounting books should be kept reliably, error-free, verifiable and up-to-date, and transactions should be documented with reliable accounting documents.
At the same time, the legal norm resulting from the provision of Article 20 of the Polish Accounting Act introduces the types of documents that may constitute the basis for recording business transactions in the accounting books. Therefore, it should be concluded that in the light of Article 9 sec. 1 of the Polish CIT Act, any accounting document that will be appropriate for entering the cost into the books of account will also be a document appropriate for tax purposes, including the one entitling to include certain expenses as tax-deductible costs.
Analyzing the above, it should be pointed out that the source documents constituting the basis for entries in the accounting books and, consequently, the basis for classifying expenses as tax-deductible costs may be stored in any form (subject to the conditions set out in the VAT Act with respect to invoices, of course).
However, since the Polish: CIT Act and the Accounting Act do not contain provisions on the manner of storing accounting documents, while the Polish VAT Act generally allows them to be stored in electronic form, in the author’s opinion, paper invoices – in the context of documenting expenses as tax-deductible costs – can only be archived in electronic form.
The correctness of this approach has been confirmed by the tax authorities in individual interpretations, for example in the advance tax ruling of the Director of the National Tax Information of date:
- 14 December 2022 (file reference number 0114-KDIP2-2.4010.300.2018.10.S/AS);
- 12 May 2020 (file reference number 0111-KDIB1-2.4010.103.2018.11.BG);
- 29 June 2016 (file reference number IBPB-1-2/4510-486/16/AnK);
- October 6, 2016 (file reference number 2461-IBPB-1-3.4510.838.2016.1.KB).
Other
It is important to confirm the possibility of implementing this solution with the auditor – on the basis of accounting regulations (including the Polish Accounting Act) so that he or she confirms that the adoption of such a practice is consistent with them.
It is also worth confirming the possibility of implementing this solution with the legal department. Invoices are potential evidence in court proceedings, especially those related to employee settlements. They are also essentially the basis for complaints. Therefore, it is necessary to assess from the point of view of other areas of law, especially civil law or labor law.
Notwithstanding the above, before implementing this solution – due to its systemic nature – it is also worth confirming the correctness of this approach by way of an individual interpretation.
