Recognition of electronic invoices in the PDF system as tax deductible costs
INDIVIDUAL INTERPRETATION ILPB3 / 423-97 / 11-2 / GC June 7, 2011 Tax Chamber in Poznań
Based on Article. 14b § 1 and § 6 of the Act of August 29, 1997 - Tax Ordinance (consolidated text Journal of Laws of 2005, No. 8, item 60, as amended) and § 2 and § 6 of the Regulation of the Minister of Finance of June 20, 2007 on the authorization to issue interpretations of tax law (Journal of Laws No. 112, item 770, as amended). The Director of the Tax Chamber in Poznań, acting on behalf of the Minister of Finance, states that the position of the limited company liability, presented in the application of February 18, 2011 (date of receipt on March 7, 2011) for a written interpretation of the tax law regarding corporate income tax in the scope of recognizing as the basis for recognizing expenses as tax deductible costs of electronic invoices in the system PDF - is correct.
On March 7, 2011, the above-mentioned application for a written interpretation of tax law in an individual case regarding corporate income tax in terms of recognition as the basis for recognizing expenses as tax deductible costs of electronic invoices in the PDF system.
The following description of the future event is presented in the present application.
The Company is interested in receiving VAT invoices from the Company's contractors electronically in the form of a file - in PDF format, which will not be secured with an electronic signature or a password. However, if necessary, the Company may introduce a password known to the contractor and the Company.
The company, in accordance with the law, will consent to contractors to send invoices electronically.
The invoices received by the Company in an electronic version in PDF format will then be printed and stored in paper form, constituting the basis for deducting VAT and posting tax deductible costs for corporate income tax purposes.
Therefore, the following question (No. 1 in the application) was asked regarding the corporate income tax.
Do the VAT invoices received by the Company electronically in PDF format, which are not electronic invoices secured with an electronic signature or password, meet the condition of authenticity of origin and integrity of the content, and thus constitute the basis for deducting VAT and posting tax deductible costs in personal income tax? legal.
The applicant expressed the view that, in accordance with the law on sending invoices in electronic form:
- Legal status until December 31, 2010
Until the end of 2010, the issue of sending invoices by electronic means was the subject of numerous controversies and disputes under the applicable VAT Act and its implementing acts. First of all, it should be noted that the concept of electronic form was narrow and in practice it applied only to invoices certified with a certified electronic signature. In fact, it meant a complete lack of interest in using this form in relations between entrepreneurs.
Tax authorities, striving to fully secure and maximize control over the transactions constituting the subject of tax proceedings, generally required that VAT invoices be stored and sent in paper form.
In disputes relating to this issue, it was argued that these requirements exceeded the standards set out in Community law. More specifically, it is Directive 2006/112 // EC (hereinafter: Directive 112). Pursuant to Art. 226 of Directive 112, the authenticity of the origin and integrity of the content of the invoice, as well as their legibility, should be ensured throughout the storage period of invoices.
The catalog of forms in which invoices are to be issued and stored has not been closed. However, the restriction was introduced in Polish law, on the basis of the regulations of the Minister of Finance to the act on tax on goods and services.
- Legal status after January 1, 2011
Taking into account the pace of market turnover, the progressive computerization of business relations and the digitization of entrepreneurs' activities focused on savings, it became necessary to re-regulate the discussed issue.
In the first place, the changes were made at the level of Community law. Directive 112 was amended by Council Directive 2010/45 / EU of 13 July 2010, which aims, inter alia, to liberalize the standards for sending and storing electronic invoices and to equate electronic and paper invoices.
The above changes were implemented in Polish law, including in the Regulation of the Minister of Finance of 17 December 2010 on sending invoices in electronic form, rules for their storage and the procedure for making them available to the tax authority or the fiscal control authority (Journal of Laws No. 249, item 1661; hereinafter: the new regulation).
The analysis of the new regulation shows that sending invoices by electronic means is acceptable under the following conditions:
- The use of a form that ensures the authenticity of the origin and integrity of the content of the invoice when sending them (§ 4).
- Obtaining consent from the contractor to send invoices by electronic means (§ 3 section 1).
Ad. 1. Authenticity of origin and integrity of content.
For the purposes of the regulation, authenticity is understood as certainty as to the identity of the supplier of goods or service provider or the issuer of the invoice. Integrity, on the other hand, is the fact that the data contained in the invoice does not change. While the previous regulation was in force (Regulation of 14 July 2005, Journal of Laws No. 133, item 1119), the need to maintain the above-mentioned features was confirmed by the imposition of a closed catalog of forms in which electronic invoices may be sent. This concerned the institution of secure electronic signature and electronic data interchange (EDI).
Currently, pursuant to § 2 para. 2 of the new regulation, the catalog has been opened and is not limited to the above solutions. The legislator uses the phrase "in particular" in this paragraph, which allows treating the secure electronic signature and EDI only as examples.
Accordingly, the invoice may be sent and stored in any electronic format. This is also confirmed by the justification for the draft of the new regulation: "It should be emphasized that in the case of acceptance in electronic form, the existing requirements were abandoned in order to use a secure electronic signature, verified with a valid qualified certificate or electronic data interchange (EDI). (...) The indicated methods of ensuring the characteristics of invoices in question are only an exemplary calculation, which means that the taxpayer may apply any other means of ensuring the authenticity and integrity of the invoice. " It is debatable whether this justification can be treated as an authentic interpretation, nevertheless, when analyzing the current regulation, the intention of the legislator on the basis of it cannot be ignored.
According to the justification to the draft regulation in question, it has been correlated with the amendment to the regulation of the Minister of Finance of November 28, 2008 on tax refunds to certain taxpayers, issuing invoices, their storage and the list of goods and services to which the tax exemption does not apply on goods and services (Journal of Laws No. 212, item 1337, as amended).
The above change, in relation to the discussed facts, concerns mainly § 21 sec. 2. Until now, taxpayers were required to keep originals and copies of invoices and corrective invoices, as well as duplicates of these documents "in their original form". Currently, they can be stored "in any way", ensuring the authenticity of origin and integrity of the content.
Referring to the presented facts, it should be noted that the PDF format used by the Company guarantees that the content of the invoice will remain unchanged and confirms the authenticity of the origin. This format, because it makes it impossible to make changes to the content of the file, and any attempts to interfere with its content leave traces that make it possible to determine the changes made.
It should be pointed out that electronic invoices in the presented actual state have at least the same degree of authenticity and integrity of content as paper invoices. The authenticity of the origin of paper invoices was once assessed through handwriting research. However, such proofs cannot be produced on printed invoices common today. Hence, having at your disposal a paper invoice and an electronic invoice in PDF format, the latter gives a greater guarantee of authenticity, allows you to check the integrity of the data and examine additional information on the origin of the file.
Ad. 2 Contractor's consent.
The provisions of the new regulation, ie § 3 sec. 1 and 2, as well as the provisions of the Regulation of 2005, require that the process of sending invoices by electronic means in any format has been previously approved by the invoice recipient, and therefore in the presented facts - by the Company. Acceptance may be in writing or in electronic form.
As can be seen from the description of the facts, the Company, as the recipient of VAT invoices sent electronically, will give the contractors the consent referred to above.
In the opinion of the Company, the position presented in this application should be considered correct. Therefore, in accordance with the above-mentioned legal provisions, there are no obstacles for the Company, with its prior consent to contractors, to receive VAT invoices from these entities only electronically in PDF format, not secured with either an electronic signature or a password. Nevertheless, should the authority still recognize the need to use the password, the Company is ready to use it.
The company derives its position from legal regulations, which clearly indicate an open catalog of forms in which VAT invoices can be sent. Open catalog does not mean that these forms are free. It is important that the authenticity of the origin and the integrity of the content are ensured, which, according to the Company, is ensured by a VAT invoice in PDF format.
The consequence of considering the Company's position as correct is the possibility of deducting VAT and posting tax deductible costs in the corporate income tax on the basis of a VAT invoice received electronically in PDF format, then printed and stored in paper form.
In the light of the applicable legal status, the position of the Applicant regarding the legal assessment of the presented future event is considered correct.
Pursuant to Art. 15 sec. 1 of the Corporate Income Tax Act (consolidated text: Journal of Laws of 2011, No. 74, item 397), tax deductible costs are costs incurred in order to generate income or to maintain or secure a source of income, except for the costs listed in art. 16 sec. 1 (...). The above means that basically all incurred expenses, i.e. directly and indirectly related to obtaining revenues, excluding the expenses listed in Art. 16 sec.1 of the Corporate Income Tax Act, they may constitute tax deductible costs, as long as they are in a cause-and-effect relationship with the generated income, including maintaining or securing the functioning of the source of income.
Moreover, recognizing an expense as a tax expense requires the taxpayer to prove that the expense is rationally and economically justified.
Thus, each expense incurred by the taxpayer should be subject to individual analysis in order to qualify it in law, except when the act clearly indicates its belonging to the category of tax deductible costs or excludes the causal relationship between the incurring cost and income, or maintaining or securing the source. income.
In addition, recognition of a given expense as tax deductible costs depends on whether it is not included in Art. 16 sec. 1 of the Corporate Income Tax Act, i.e. in the group of expenses that are not tax deductible costs.
Summarizing the above, it should be stated that the tax deductible cost will be an expenditure that meets all of the following conditions:
- was incurred by the taxpayer,
- is definitive, (real),
- is related to the business activity conducted by the taxpayer,
- it was incurred in order to obtain revenues, preserve or secure their source or may have a different impact on the amount of revenues obtained,
- has been properly documented
It should be emphasized that in order to prove the relationship between cost and income, the taxpayer must have the evidence required by law. Art. 15 should be interpreted jointly with Art. 9 sec. 1 of the Corporate Income Tax Act, pursuant to which taxpayers are required to keep accounting records, in accordance with separate regulations, in a manner ensuring the determination of the amount of income (loss), tax base and the amount of tax due for the tax year, as well as to be taken into account in records of fixed assets and intangible assets, information necessary to calculate the amount of depreciation in accordance with the provisions of art. 16a-16m.
However, according to Art. 20 paragraph 1 of the Accounting Act of September 29, 1994 (consolidated text: Journal of Laws of 2009, No. 152, item 1223, as amended) on accounting, the accounting books of the reporting period should be entered in the form of an entry, any event that occurred during the reporting period. Accounting entry, in accordance with art. 23 sec. 2 of this Act should contain at least:
- the date of the economic transaction
- specification of the type and identification number of the accounting document which is the basis for the entry and its date, if it differs from the date of the operation
- understandable text, abbreviation or code for the description of the operation, but it is necessary to have a written explanation of the content of the abbreviations or codes
- amount and date of entry
- designation of the accounts concerned
Article 21 (1) 1 above of the Act stipulates that an accounting document should contain at least:
- specification of the type of proof and its identification number
- identification of the parties (names, addresses) carrying out the business transaction
- description of the operation and its value, if possible, also expressed in natural units
- the date of the operation, and if the proof was prepared on a different date - also the date of the proof
- the signature of the issuer of the certificate and the person from whom the assets were issued or received
- confirmation of verification and qualification of the evidence for inclusion in the accounting books by indicating the month and the manner of recognizing the evidence in the accounting books (assignment), signature of the person responsible for these indications
The provisions of Art. 20 and art. 21 of the Accounting Act define the principles of documenting business operations, in particular the conditions to be met by accounting evidence constituting the basis for entries in the accounting books. In the light of these regulations, the accounting vouchers should be reliable, i.e. consistent with the actual course of the business operation documented, complete, free from accounting errors, and containing the above-mentioned elements.
The accounting voucher that will be appropriate to enter the cost into the books of accounts will also be an appropriate document for tax purposes.
Pursuant to Art. 180 § 1 of the Act of August 29, 1997 - Tax Ordinance (consolidated text Journal of Laws of 2005, No. 8, item 60, as amended), everything that may contribute to clarify the matter, and it is not against the law.
Evidence in tax proceedings, in accordance with art. 181 of the Tax Code, may be, in particular, tax books, declarations submitted by a party, witness testimonies, expert opinions, materials and information collected as a result of the inspection, tax information and other documents collected in the course of checking or tax control, subject to article 22. 284a § 3, art. 284b § 3 and article. 288 § 2, and materials collected in the course of criminal proceedings or proceedings in cases of tax offenses or tax offenses. The expression "in particular" used by the legislator indicates that the catalog of evidence is open. It is therefore advisable to have (in terms of possible audit or tax proceedings) all evidence confirming the occurrence of a given economic event.
The future event presented in the application shows that the Company is interested in receiving VAT invoices from the Company's contractors electronically in the form of a file - in PDF format, which will not be secured with either an electronic signature or a password. However, if necessary, the Company may introduce a password known to the contractor and the Company. The invoices in question, as confirmation of incurring expenses, will constitute the basis for the Company to post them as tax deductible costs.
The Corporate Income Tax Act does not contain a definition of an "invoice", and therefore, following the directives for the application of an external system interpretation, one should refer to the regulations on the principles of taxation with tax on goods and services.
In the individual ruling of 6 June 2011, ref. ILPP4 / 443-209 / 11-2 / PG, the Director of the Tax Chamber in Poznań, acting on behalf of the Minister of Finance, indicated that, taking into account the provisions of the law and the presented description of the case, it should be stated that the current legal regulations allow for the possibility of sending invoices in electronic form. Therefore, the receipt of invoices in the form of a PDF file is equivalent in taxation to the receipt of invoices in paper form, provided that the authenticity of the origin and integrity of the content of the invoices in question are ensured, as referred to in the Regulation of the Minister of Finance of December 17, 2010 on sending invoices in electronic form, rules for their storage and the procedure for making them available to the tax authority or the fiscal control authority (Journal of Laws No. 249, item 1661).
In view of the above, VAT invoices received electronically in PDF format, which are not electronic invoices secured with an electronic signature or password, meeting the criteria of authenticity of origin and integrity of the content of invoices in the sense provided for by the provisions of the VAT Act, will constitute the basis for booking tax deductible costs in the corporate income tax.
The interpretation concerns the future event presented by the Applicant and the legal status in force on the date of issuing the interpretation.