The current regulations allow for the possibility of storing invoices (issued to contractors and received from them in paper form) in electronic form, in any way, e.g. in the form of an electronic record on electronic data carriers, however, this method is to ensure that invoices are stored broken down into settlement periods in a way that ensures their easy retrieval and the 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.
A company that conducts business activity in the field of wholesale and retail sale of metal products, as well as the sale of goods via the Internet, applied for a tax ruling. During the month, it issues about 5000 sales invoices for entrepreneurs. Invoices and their copies are printed, with the original being handed over to the customer, while the copy is archived in paper form. The company plans to take measures to reduce the costs of printing, storing and archiving invoices.
The company added that the computer system it uses allows it to collect relevant data about customers and issue VAT invoices. After issuing invoices in the sales service system, the document is saved in the program's memory, and the company can print the original, copies and duplicates. From this point on, users cannot edit issued sales documents. Editing documents at this stage is possible only for designated users who have the appropriate permission to edit issued documents. After exporting documents to the financial and accounting module, they are simultaneously entered into VAT registers - from that moment on, the program does not allow you to edit, cancel or delete documents. The program also allows you to save them in pdf format, and the company can print the original, copies and duplicates at any time. The system ensures the security of the data contained in the invoice. The IT system and the method of storing files ensure direct access to the stored information. Due to the connection of the module in which invoices are issued with the VAT Register and the easy availability of archived invoices, which will be archived by the system broken down into settlement periods with the possibility of searching and grouping them according to given keys, e.g. month, contractor, etc., the Company intends to resign from printing copies of invoices and archiving them in paper form. The original paper invoices will be delivered to customers by post or they will collect them in person.
The company wanted to know whether it could store copies of invoices that are not electronic invoices in a form other than paper - in the form of an image of a traditional invoice /pdf/. In her opinion - yes.
The Director of the National Tax Information agreed with the company's position. In the issued interpretation, the authority explained:
Pursuant to Article 106b(1)(1) of the Value Added Tax Act, the taxpayer is obliged to issue an invoice documenting the sale, as well as the supply of goods and the provision of services referred to in Article 106a(2), made by the taxpayer to another taxpayer of tax, value added tax or tax of a similar nature, or to a legal person who is not a taxpayer.
Article 2(31) of the Act provides that whenever the provisions of the Act refer to an invoice, it shall be understood as a document in paper or electronic form containing the data required by the Act and the regulations issued on its basis.
Pursuant to Article 106g(1) of the Act, invoices are issued in at least two copies, one of which is received by the buyer and the other is kept in the documentation by the taxpayer making the sale.
Pursuant to Article 106m(1) of the Act, the taxpayer determines the method of ensuring the authenticity of origin, integrity of content and legibility of the invoice.
Article 106m(2) of the Act provides that the authenticity of the origin of an invoice is understood as certainty as to the identity of the supplier of goods or the service provider or the issuer of the invoice.
The integrity of the invoice content is understood as not changing the data in the invoice that should be included in the invoice (Article 106m(3) of the Act).
The authenticity of origin, integrity of the content and legibility of the invoice can be ensured by means of any business controls that establish a reliable audit trail between the invoice and the delivery of goods or services (Article 106m(4) of the Act).
Moreover, pursuant to Article 106m(5) of the Act, in addition to the use of business controls specified in section 4, the authenticity of origin and integrity of the content of an electronic invoice are maintained, in particular, in the case of using:
- qualified electronic signature or
- Electronic Data Interchange (EDI) in accordance with the Agreement on the European Electronic Data Exchange Model, if the concluded agreement concerning this exchange provides for the application of procedures guaranteeing the authenticity of the origin of the invoice and the integrity of its data.
The above provision defines the technological methods of sending invoices in electronic form (qualified electronic signature and EDI electronic data interchange system), which have been recognized by the legislator by virtue of the Act as ensuring the authenticity of the origin and integrity of the content of electronic invoices. By using one of the above methods, the taxpayer can be sure that he ensures that the above-mentioned features of invoices are met. However, the indicated methods are only an example of calculation, which means that the taxpayer may use any other means to ensure the authenticity and integrity of the invoice.
It should be noted that for the purposes of the VAT regulations, the term "business controls" should be understood as a process through which the taxpayer creates, implements and updates a sufficient level of assurance as to the identity of the supplier or service provider or the issuer of the invoice (authenticity of origin), in terms of the fact that the VAT data has not been changed (integrity of the content) and in terms of the legibility of the invoice from the moment of issuing the invoice until the end of the period Stores. Business control should provide a certain control path, thanks to which it is possible to link the invoice with the delivery of goods or services on which it is based.
Business controls should be appropriate to the size of the business and the type of taxpayer and should take into account the volume and value of transactions, as well as the number and type of suppliers or service providers and buyers or service recipients. Other factors should also be taken into account where appropriate.
An example of business control is the possession of supporting documents, such as an order, contract, transport document or request for payment, which will accompany the existing commercial transactions.
On the other hand, the concept of a "reliable audit trail" means that the relationship between supporting documents and transactions is easy to trace (thanks to having sufficient data to link documents), consistent with the procedures established in the company and reflects the processes that actually took place. The audit trail for VAT purposes should ensure a verifiable link between the invoice and the supply of goods or services so as to make it possible to verify that the invoice reflects that the supply of goods or services has taken place. However, the means by which the taxpayer can demonstrate the above relationship are left to the discretion of the taxpayer.
Article 112 of the Act provides that taxpayers are obliged to keep records kept for the purposes of tax settlement and all documents, in particular invoices, related to this settlement until the expiry of the limitation period for the tax liability (...).
Pursuant to Article 112a(1) of the Act, taxpayers shall keep:
- invoices issued by yourself or on your behalf, including reissued invoices,
- invoices received, including reissued invoices
- 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 statute of limitations for the tax liability.
Pursuant to Article 112a(2) of the Act, taxpayers with their registered office in the territory of the country are obliged to store invoices in the territory of the country.
Pursuant to Article 112a(3) of the Act, the provision of paragraph 2 does not apply if invoices are stored outside the territory of the country in electronic form in a way that allows the head of the tax office, the head of the customs and tax office, the director of the tax administration chamber or the Head of the National Tax Administration, by electronic means, to access these invoices online.
Pursuant to Article 112a(4) of the Act, taxpayers shall provide the head of the tax office, the head of the customs and tax office, the director of the tax administration chamber or the Head of the National Tax Administration upon request, in accordance with separate regulations, immediate access to the invoices referred to in paragraph 1, and in the case of invoices stored in electronic form – also their immediate collection and processing of the data contained therein.
It follows from the above-mentioned provisions that the current legal regulations allow for the possibility of storing invoices (issued to contractors and received from them in paper form) in electronic form, in any way, e.g. in the form of an electronic record on electronic data carriers, however, this method - as required by the legislator - is to ensure that invoices are stored broken down into settlement periods in a way that ensures their easy retrieval and the authenticity of origin, integrity of the content and legibility of these invoices from the moment they are issued or received until the expiry of the limitation period for the tax liability. In addition, the taxpayer is obliged to provide the relevant authorities with immediate access to invoices upon request, in accordance with separate regulations, and in the case of invoices stored in electronic form – also their immediate collection and processing of the data contained therein.
As it follows from the circumstances of the case, the described invoice storage system ensures the security of the data contained in the invoice as well as their legibility and authenticity. At the same time, archiving is carried out by settlement periods and allows for easy and quick finding of invoices and printing them at any time.
Therefore, due to the fact that the method of archiving invoices proposed by the company meets the conditions of authenticity and integrity referred to in Article 106m of the Act and allows for easy retrieval, as well as immediate access in the event of an inspection, it should be stated that paper invoices may be archived in the form of an electronic record, i.e. an image of the invoice in the pdf file format.
Individual tax ruling of 21 August 2020, file no. 0113-KDIPT1-2.4012.472.2020.1.MC - Director of the National Tax Information Service - fulltext of the interpretation.