NEWSLETTER
No. 32 January 2024
Malinowski & Associates. Legal Advisors. Partnership
Table of contents
Government support for borrowers.
Who will be able to take advantage of the credit vacation?
How to take advantage of a credit vacation?
Expiration of the Trusted Profile.
Possibilities for creating a Trusted Profile.
National e-Invoicing System – a challenge for Entrepreneurs.
Obligation to issue e-Invoices.
Problems in labeling the invoice recipient.
E-Invoices without attachments.
Logical structure of the invoice.
Flat-rate farmers vs. invoicing.
The problem of a foreign currency invoice.
Government support for borrowers
Introduction
Government in July 2022. initiated borrower assistance through the adoption of the Law on Community Financing for Business Ventures and Borrower Assistance. The “credit vacation” mechanism allowed for the postponement of mortgage repayment dates, both in the principal and interest areas – hence when installments resume, there will be no outstanding interest to pay. However, suspending repayments does not mean that installments are canceled. They are added to the repayment schedule after the “vacation” is over (without charging additional interest).
A total of eight loan installments could be missed in 2022 and 2023 as part of the loan vacation. Statutory loan vacations were introduced to help borrowers who are struggling to repay their debt due to rising interest rates.
Bill on credit vacations
On November 3, 2023. A draft law on crowdfunding for business ventures and assistance to borrowers adopted by the Council of Ministers was referred to the previous parliament. According to the government’s proposed plan, there will be an option in the coming year to defer loan repayment under the terms in effect in 2023. Credit vacations in 2024. are to apply to gold mortgages concluded before July 1
2022 r.
The cost of the government’s borrower support program is borne entirely by banks, which reduces interest income and negatively affects profits.
Who will be able to take advantage of the credit vacation?
Compared to the current legislation, the list of eligible persons will be narrowed. The suspension of repayment will be available only to borrowers whose original loan amount did not exceed 400,000 zlotys.
The ministry said there is also an option to suspend repayment of the loan if the principal value of the loan exceeds 400,000 zlotys, but does not exceed 800,000 zlotys. In such a situation, the cost of servicing the loan, including both principal and interest payments, must account for more than 50 percent of household income. A person applying for the use of credit vacations must confirm that this condition is met, taking into account the average monthly income of the three months preceding the application. The above rules are designed to make sure that only those who actually need it benefit from the vacation assistance.
How to take advantage of a credit vacation?
Borrowers who have not yet been able to take advantage of the credit vacation can get detailed information on their bank’s website. Information on the application procedure is available there. The application can be submitted not only in person during a visit to a bank branch, but also through electronic banking or by email. Keep in mind that it is in the bank’s own interest to help the borrower. The banks are keen to stabilize the customer’s financial situation so that they can continue to repay the obligation.
Credit vacation schedule
The 2024 credit vacation will be available starting March 1, 2024. This is due to the need for the provisions of the draft law to take effect. The first suspension will therefore last until March 31. For each consecutive quarter of the year, there will be one month in which to suspend loan payments. In total, in 2024 the borrower will have 4 months of vacation from paying installments. It is up to the repayer to decide when and how many times to use this option.
Summary
From an economic point of view, taking a credit vacation was cost-effective for any person who met the eligibility criteria for this benefit. Those with a stable financial situation had the opportunity to accelerate repayment of their obligation. All that was needed was to allocate funds that would normally be used for regular installment payments to additional debt repayment.
Information released by the ministry shows that the number of credit vacations to date includes 1.09 million home loans. In the case of these loans, the banks have granted requests to suspend repayment.
Trusted Profile
Introduction
When dealing with official matters, confirmation of one’s identity is a frequent requirement. One way to confirm identity over the Internet is to use a free trusted profile (eGo). A trusted profile is a means of electronic identification, consisting of a login and password. The trusted profile allows citizens to log in to public e-services, i.e. Business.gov.pl, ePUAP or Your e-PIT. It also allows you to sign and send documents to numerous authorities.
The use of the trusted profile is available to anyone who has a PESEL number and has full or limited legal capacity. A foreigner can also set up a trusted profile, provided they have a PESEL number.
A trusted profile holder can now take advantage of a wide list of online services, on various government portals. A trusted profile holder can on the EPUAP website, among other things. Apply for an identity card or the European Health Insurance Card (EHIC). The abbreviation ePUAP stands for Electronic Platform for Public Administration Services, where one can handle official matters online by signing with a trusted profile. One of the additional safeguards when using a trusted profile is authorization via SMS message.
However, it is important to note that a trusted profile is not the same as a qualified electronic signature. Both electronic signatures and ePUAP are signatures that confirm identity. However, the trusted profile has a narrower application, as it can only be used for official matters. Qualified electronic signatures, on the other hand, can additionally be used to sign some computer documents (e.g. PDFs) or e-mails.
Expiration of the Trusted Profile
The trusted profile is valid for 3 years. During the pandemic, the validity of the trusted profile was automatically extended. Once the epidemic emergency is canceled, the validity of the profiles must already be renewed independently. On October 31, 2023, the deadline for extending the operation of trusted profiles passed. Holders were informed of the need to renew the profile via SMS. Those who failed to renew them by the deadline can re-establish a new profile. If you have nevertheless failed to renew your trusted profile, you can set up a new profile online.
For those who have not been able to renew their trusted profile or have experienced technical difficulties with both e-banking and the system, the service has expired. With the end of October, trusted profile holders encountered serious, persistent difficulties in accessing the tool’s functionality. This was likely due to system overload, as many holders decided to renew their trusted profiles at the last minute.
Possibilities of creating a Trusted Profile
You can set up a trusted profile on your own, without leaving home, using, for example, an online bank account, an account in the Polish Post’s Envelo system, an ID card with an electronic layer or a qualified electronic signature. We can also set up a trusted profile online and confirm it during a visit to a Confirmation Point. There are many ways for citizens to create a trusted profile. Below is a list of them:
- Filling out the application online
As a first step, the citizen fills out a simple online application at www.pz.gov.pl, and then confirms his identity by going to one of 2,000 points in Poland and around the world. These establishments are usually city offices, branches of the Social Security Administration or the tax office. The list of points can be found at: www.pz.gov.pl.
- Create a Trusted Profile through the Bank
The Trusted Profile can be set up either through the e-banking system or through another identity provider. After logging into the online banking platform, find the section that allows you to create a trusted profile. In different banks, this option may be placed in a different place. You don’t have to confirm anything anymore, the bank itself will transfer your data to http://pz.gov.pl.
You can set up a trusted profile if you have an online account with any of the following banks:
- ING Bank Śląski
- Bank Pekao
- mBank
- Santander
- PKO Bank Polski
- Bank Millennium
- Inteligo
- Envelo (Polish Post Group)
- Alior bank
- T-mobile bank
- Use of e-card
It is possible to set up a trusted profile using an ID card with an electronic layer and an NFC reader. If you have a new ID card (eID) that was issued after March 4, 2019, and a smartphone with an NFC contactless reader, you can set up a trusted profile by applying your ID card to your phone. All you need to do is download the eDO App available on Google Play and the App Store.
- Talking to an official
A video meeting with an administrative employee will be conducted using Microsoft Teams. To participate in the conversation, you will need a device equipped with a camera and microphone, such as a cell phone, tablet or laptop. A link to the video meeting will be sent by the official in an email. During the video call, the citizen will confirm his identity based on the camera image. In this case, all you need to do is book an appointment and make an appointment.
Use of a trusted profile
For what activities can a trusted profile be used? The following is a sample list of things a petitioner can do:
- Apply for business registration,
- report the loss of an ID card,
- Apply for a European Health Insurance Card,
- Arrange becikowe, parental benefits, Large Family Card, Alimony Fund Benefit,
- obtain a copy of the civil status certificate: marriage, birth, death,
- report the birth of a child,
- check your tax returns,
- check penalty points,
- report an inheritance or donation,
- download a criminal record certificate,
- Deal with Social Security.
National e-Invoicing System – a challenge for Entrepreneurs
Introduction
We already covered the topic of the National e-Invoice System in the September issue of our newsletter. Realizing the scale of the changes that await entrepreneurs in 2024, we see the need to discuss the biggest challenges related to the introduction of a mandatory e-Invoice system in Poland.
Obligation to issue e-Invoices
Not every tax payer will be able to cope with the new obligations, which will prompt accounting firms to introduce new services, such as handling invoicing on behalf of clients. It is therefore worth checking whether the insurance policies available on the market cover this type of service activity. Contracts with customers may need to be adjusted, which could increase the price of services provided.
The most important challenge facing micro-entrepreneurs, who until now have only used paper invoices and have not used electronic programs, is the need to master the technical skills associated with e-invoicing. The owners of these companies will be obliged to learn how to handle e-invoices, or they may consider outsourcing the process to accounting firms, or hiring someone with the appropriate competence within their organization or training already contracted associates
Date on the invoice
When an e-invoice is issued, the taxpayer will have two dates on the documents. The first will be determined in the taxpayer’s financial and accounting system. The second date, on the other hand, will mark the moment the invoice is transferred to the National e-Invoice System (KSeF), and only this date will be relevant in the context of tax settlements. In accordance with current regulations, an e-invoice is considered to have been issued on the day it is sent to KSeF.
In practice, there may be discrepancies between the two dates, such as when KSeF rejects an invoice or there are delays in the process of accepting invoice packages. As a result, there may be difficulties in correctly recognizing tax liabilities in the VAT area, as well as in determining the timing of income generation for PIT/CIT taxes and in calculating the exchange rate.
It is worth noting that because the date of issuance of an e-invoice is the moment it is submitted to KSeF, not the time the document is generated in the taxpayer’s internal system, issuing foreign currency invoices in KSeF can be a challenge, especially when they are created late in the evening and, for technical reasons, there is no assurance that the shipment will be completed on the same day. In practice, this can lead to a situation where the date of issuance of the invoice in the taxpayer’s system (specified in the P1 field) differs from the date of transmission of the invoice to KSeF, i.e. when it is considered issued.
Problems in marking the invoice recipient
Currently, in case of uncertainty as to whether the purchaser of goods or services is an active VAT taxpayer, exempt, or purchasing as a consumer, an invoice could easily be issued. In the National e-Invoice System (KSeF), the person issuing the invoice will be required to specify whether the invoice recipient is an active taxpayer, an exempt taxpayer or perhaps a consumer. A problem may arise because some exempt taxpayers may not be aware of their VAT status, and thus – not provide reliable information to the invoice issuer.
E-Invoices without attachments
Currently, taxpayers send their contractors various attachment documents, such as specifications, protocols or documentation confirming the performance of services, along with the invoice. Such documentation will not be able to be uploaded to the National e-Invoicing System (KSeF). Taxpayers will only have the option of using the e-invoice voluntary fields. If this is not enough, additional documentation will need to be provided separately, as previously agreed with the contractor. This course of action can lead to difficulties in integrating these documents into the system with the invoice. As a result, taxpayers will be forced to make changes to the procedures they use.
Logical structure of the invoice
On June 29, 2023. The Ministry of Finance has published the final version of the FA(2) logical structure template (template number 2023/06/29/12648) in the Central Repository of Electronic Document Templates. It is worth noting that if an invoice does not conform to the established logical structure of the system, the National e-Invoice System (KSeF) will reject it upon detecting the error, without informing the taxpayer of the specific location of the problem. This results in the need to correct the invoice structure and resubmit, sometimes multiple times, which can be particularly cumbersome when creating invoice packages. To avoid this problem, taxpayers should take care to pre-validate invoices in their own system.
Similar challenges may also arise in the case of duplicate invoices, which will also not be detected by KSeF. Therefore, it is important for taxpayers to protect themselves against such a possibility through appropriate verification in their system.
Flat-rate farmers vs. invoicing
One of the main challenges for vendors will become the correct identification of customers. There are special difficulties related to invoicing for flat-rate farmers and those who receive income from property rentals, known as private rentals.
It is worth noting that it is commonly assumed that taxpayers have a taxpayer identification number (TIN), in which case the seller should issue invoices in the National e-Invoice System (KSeF). Nevertheless, flat-rate farmers usually do not have a TIN, although they are taxpayers under VAT regulations. These farmers are subject to a special procedure, and at the same time sales to them must be registered with a fiscal cash register. For this reason, the vendor will be obliged to issue an invoice for them in KSeF attached to the receipt.
The problem of invoice in foreign currency
The amount of tax on the invoice should always be expressed in the national currency. In a situation where the amounts used to determine the tax base are determined in a foreign currency, conversion to zlotys shall be made according to the average exchange rate of the foreign currency in question announced by the National Bank of Poland on the last business day preceding the day on which the tax obligation arises. The taxpayer may also choose to convert these amounts into zlotys according to the latest exchange rate published by the European Central Bank on the last day before the tax liability date. According to Art. 31a para. 2 VATU, where the taxpayer issues an invoice before the tax liability arises, and the amounts used to determine the taxable amount are specified on that invoice in foreign currency, the conversion to zlotys shall be made at the rate of exchange on the last business day preceding the date of issuance of the invoice.
Summary
On July 1, 2024. new electronic invoices will come into effect. The introduction of the National e-Invoice System is first and foremost a change in workflow from the traditional accounting model, in which entrepreneurs submit paper or PDF invoices to themselves, to an electronic-only model using the KSeF system. The first step to introducing electronic invoicing is to digitize the exchange of data within the company.
