A final invoice (faktura końcowa) is a key document in settling commercial transactions, especially when a business has already received advance payments towards future supplies or services. It closes the whole order and allows the transaction to be settled correctly for both VAT and income tax. To issue a final invoice correctly, you need to know the tax rules and meet specific formal requirements.
Businesses often face a situation where a customer pays an advance before the order is carried out. In such cases you need to issue an advance invoice (faktura zaliczkowa) and then a final invoice once the goods are delivered or the service is performed. This process has significant tax and accounting consequences, which you should understand properly and apply in practice.
When to issue an advance invoice and a final invoice
The obligation to issue an advance invoice comes from the VAT Act and applies when a business receives all or part of the payment before the sale takes place. Under Article 106b section 1 point 4 of the VAT Act, active VAT taxpayers must document the receipt of an advance by issuing an appropriate invoice.
As a rule, an advance invoice is issued by an active VAT taxpayer that has received payment before making a sale to another taxpayer or a legal person (to a consumer – at the consumer's request, Article 106b section 3 point 1a). The amount of the advance does not matter. You do not need to issue an advance invoice if the advance was received in the same month in which the sale was made (Article 106b section 1a)
There are, however, exceptions to this obligation that concern specific types of transactions. No advance invoice is issued for an intra-Community supply of goods, or where the payment relates to transactions for which the tax point arises on the date the invoice is issued.
The specific supplies and services exempt from the obligation to issue advance invoices include:
- Supplies of electricity, heating, cooling and piped gas
- Telecommunications services and services listed in Annex 3 to the Act
- Rental, lease, leasing or similar services
- Personal protection services and services of protecting, guarding and storing property
- Ongoing legal and office services
- Distribution of electricity, heating, cooling and piped gas
The exception also covers supplies of goods made to and by a taxpayer facilitating supplies (a sales platform, Article 7a), where the tax point arises when the payment is accepted under Regulation 282/2011 (Article 19a section 1b). In such cases the business does not have to issue an advance invoice (Article 106b section 1 point 4 letter c)
A final invoice is issued under the general rules, which means that, as a rule, you must prepare it by the 15th of the month following the month in which the sale took place (Article 106i section 1; for some transactions, such as construction services, Article 106i section 3 sets special deadlines). The date the order is completed is the reference point for determining the correct deadline for issuing the final document.
Issuing both types of invoices requires the right sequence of steps:
- Receiving an advance from the customer towards a future supply
- Issuing an advance invoice within the statutory deadline
- Carrying out the order by delivering the goods or performing the service
- Issuing a final invoice settling the whole transaction
- Recording both documents correctly in the tax records
Required details of a final invoice
A final invoice must contain all the mandatory details of a standard VAT invoice, but it must also reflect the settlement of advances received earlier. The basic details include standard identification data and information about the transaction.
The mandatory details of a final invoice include:
- Date of issue
- Sequential number within the numbering series used
- Identification details of the taxpayer and the buyer, with their addresses
- Tax identification numbers of the parties
- Date of making or completing the supply of goods or performing the service
- Date of receiving the payment, if different from the date of issue
An advance invoice must state the amount of payment received and the amount of tax calculated using the formula: KP = (ZB x SP) / (100 + SP), where KP is the amount of tax, ZB is the amount of payment received and SP is the tax rate (Article 106f section 1 points 2–3). The final invoice settles these amounts
On an advance invoice, the details of the order or contract are particularly important (Article 106f section 1 point 4). They should include the name of the goods or services, the quantity ordered, the value excluding tax, the tax rates, the tax amounts and the total value including VAT.
| Invoice detail | Content | Legal basis | Special notes |
|---|---|---|---|
| Date of issue | Actual date the document is created | Article 106e VAT Act | The final invoice is issued after the goods are delivered or the service is performed (Article 106f section 3) |
| Invoice number | Unique identifier within the series | Article 106e VAT Act | Must ensure unambiguous identification |
| Parties' details | Full details of the taxpayer and the buyer | Article 106e VAT Act | Including NIP (tax identification number) |
| Advance amount | Amount of payment received earlier | Article 106f VAT Act | With VAT calculated |
Under Article 106f section 3 of the VAT Act, if the advance invoice does not cover the whole payment, the final invoice reduces the value of the goods or services by the value of the partial payments received, and reduces the tax amount by the total tax shown on the advance invoices.
A final invoice should contain the numbers of all invoices issued before the goods were delivered or the service was performed. For invoices issued in KSeF (National e-Invoicing System), you must give the KSeF numbers of the earlier advance invoices (Article 106f section 3)
Where more than one advance invoice has been issued for partial payments and together they cover the whole payment, the last one should contain the numbers of all the previous invoices (Article 106f section 4). If the advance invoices covered 100% of the order value, you may skip the final invoice, because it would show a zero amount.
Bear in mind, however, that issuing a final invoice for a zero amount is not an error. This is confirmed by an individual tax ruling of the Director of National Tax Information (KIS) of 29 May 2019 (ref. 0111-KDIB3-1.4012.186.2019.2.KO), which states that this approach is permissible and can serve as additional evidence that the sale took place.
Settling a final invoice for tax purposes
Settling a final invoice for tax purposes requires you to distinguish between the VAT consequences and the income tax effects. Each of these taxes has different rules on when the tax obligation arises and how transactions are recorded.
For VAT, under Article 19a section 8 of the VAT Act, the tax point arises when all or part of the payment is received, that is when the advance is paid. This means that as soon as the advance is received, the business must report the transaction in its VAT sales register, and the buyer may record it in its VAT purchase register after receiving the advance invoice.
Receiving an advance does not create a tax obligation for PIT (personal income tax). Under Article 14 section 3 point 1 of the PIT Act, revenue does not include payments collected towards supplies that will be made in subsequent reporting periods
This distinction matters for businesses keeping different types of records. Taxpayers using a VAT exemption (for example under Article 113 section 1) are not obliged to issue invoices, including advance invoices (Article 106b section 2) – they issue an invoice without VAT at the buyer's request (Article 106b section 3 point 2), usually when the order is completed, because an advance invoice has effects only for VAT.
The final invoice is the document that allows the transaction to be settled for income tax. You record it in the KPiR (tax revenue and expense ledger) at the full net amount of the order, regardless of the advance invoices issued earlier.
A trading company received an advance on 30 June equal to 50% of an order worth PLN 5,000 net. It issued an advance invoice and recorded it in the VAT sales register on the same day. The goods were delivered on 15 July. In the KPiR, the company recorded the full PLN 5,000 net on the delivery date on the basis of the final invoice, even though it had already received half of the payment.
There is, however, an exception to this rule. If the final invoice was issued only for record-keeping purposes – to summarise the transaction and put the documentation in order – and the advance invoices issued earlier covered the whole value of the transaction, the final invoice is not recorded in the KPiR. In that case the last advance invoice is the basis for recording the full net amount in the KPiR on the date the order is completed.
For VAT purposes, an advance invoice obliges the seller to account for the tax and gives the buyer the right to deduct it, provided the buyer is an active VAT taxpayer and the purchase is used for taxable activity. The same applies to the final invoice – the obligation or right to report VAT on the part not settled by advance invoices is settled on the basis of the final invoice.
An advance invoice is recorded in the VAT sales register on the date the advance is paid, while the final invoice is recorded for the amount not covered by the earlier advance invoice. In the KPiR, the final invoice is recorded at the full net amount of the order on the completion date
Practical settlement examples
Specific examples from business practice illustrate best how the rules on final invoices work. They help you understand the settlement mechanisms and the correct deadlines for issuing documents.
Example one – partial advance
On 30 June, XYZ placed an order with ABC for PLN 2,460 gross, including PLN 2,000 net and PLN 460 VAT. On the same day it paid an advance of PLN 1,230 gross. The goods ordered were delivered on 20 July.
ABC should issue an advance invoice for PLN 1,230 by 15 July at the latest, because the tax point arose on the day the advance was paid. The advance invoice will be recorded in the VAT sales register on 30 June – the date the advance was paid.
The final invoice should be issued by 15 August at the latest, because the tax obligation for PIT and VAT arose on the date of sale, 20 July. The final invoice will be recorded in the VAT sales register for PLN 1,230 gross (PLN 1,000 net + PLN 230 VAT), that is the part not settled by the earlier advance invoice.
In column 9 of the KPiR for sales of goods and services (from 1 January 2026; until 2025 this was column 7), the final invoice will be recorded at the net value of the whole order, that is PLN 2,000, regardless of the advance received earlier
Example two – full advance
On 1 July, Mr Aleksander received an advance from a client covering 100% of the value of the service ordered. He issued an advance invoice and reported the transaction in the VAT sales register on the same day. The service was performed on 2 August.
Where a 100% advance is received, the advance invoice is the basis for reporting revenue for income tax. The entry in the KPiR or in the revenue record (for flat-rate tax on recorded revenue, ryczałt) must be made on the date of sale, that is the date the service is performed, at the net amount of the whole order. We make KPiR and revenue record entries, advance invoices included, for clients of our accounting office.
Mr Aleksander may, but does not have to, issue a final invoice for a zero amount. If he decides to issue one, the document will serve record-keeping purposes and confirm that the service was performed.
The settlement process can be presented in the following steps:
- Receiving the advance and issuing an advance invoice
- Recording the advance invoice in the VAT sales register on the date of payment
- Making the supply or performing the service in line with the order
- Issuing the final invoice within the statutory deadline
- Recording the final invoice in the relevant tax records
- Settling the difference between the order value and the advance received
Issuing an advance invoice with a payment deadline
Businesses can issue an advance invoice with a payment deadline, which means the document is created before the money actually reaches the account – but not earlier than 60 days before the advance is received (Article 106i section 7 point 2). This can be practical when payment dates have been agreed with the contractor or when the advance is to be paid within a set time after the invoice is issued.
When issuing an advance invoice with a payment deadline, enter the appropriate payment date and do not mark the document as paid. The advance invoice is entered in the VAT register only when it is settled, so managing deadlines and settlements correctly is essential. If an issued document turns out to contain an error, our post on correcting a corrective invoice shows how to fix it.
Once the advance is received on an invoice issued with a payment deadline, settle the document using the date the payment was actually received. That date becomes the VAT tax point and the basis for recording it in the sales register
The system for settling advance invoices with a payment deadline requires particular attention to:
- Monitoring advance payment deadlines
- Dating settlements correctly according to actual receipts
- Recording entries in the VAT registers according to payment dates, not invoice dates
- Checking that issued invoices match the payments received
This approach allows better cash flow planning and keeps you compliant with tax rules, especially regarding the deadlines for settling VAT.
Final invoices in KSeF
The introduction of KSeF brought additional requirements for final invoices, especially regarding numbering and links between documents. Invoices issued in the electronic system receive unique KSeF numbers, which must be used correctly in the documentation. From 1 February 2026, taxpayers are, as a rule, obliged to issue structured invoices in KSeF (Article 106ga section 1); taxpayers whose gross sales in 2024 did not exceed PLN 200,000,000 could issue invoices outside KSeF until 31 March 2026 (Article 145l), and where the gross value of sales documented with such invoices in a month does not exceed PLN 10,000 – until 31 December 2026 (Article 145m). What to do when the date of such an invoice needs correcting is explained in our article on changing the invoice issue date in KSeF.
When advance invoices are issued in KSeF, subsequent invoices should contain the KSeF number of the advance invoice issued. This makes the links between documents fully traceable and makes it easier to check that settlements are correct.
Where advance invoices issued in KSeF cover 100% of the order value, you do not have to issue a final invoice, because it would show a zero amount. In that case the last advance invoice should contain the KSeF numbers of the previous advance invoices (Article 106f section 4) – the link comes from the numbers entered by the issuer; the system does not add them itself
The benefits of using KSeF when issuing final invoices include:
- Automatic assignment of unique document numbers
- Full traceability of links between advance invoices and final invoices
- Easier checking of settlements by the tax authorities
- Lower risk of errors in numbering and document links
- Faster verification and tax settlement processes
The electronic system does, however, require proper organisational preparation and knowledge of the specific procedures for issuing and storing electronic documents.
Errors in final invoices and their consequences
Issuing a final invoice incorrectly can lead to various tax and accounting consequences. The most common errors concern incorrect settlement of advances, wrong issue dates and incomplete document details.
Typical errors in final invoices include:
- Incorrect calculation of the amount due after deducting advances
- Missing numbers of advance invoices on the final invoice
- Wrong tax point dates
- Incorrect recording in VAT registers and accounting books
- Errors in VAT rates or taxable amounts
Errors in final invoices may require corrective invoices to be issued and, in the case of material irregularities, may also lead to tax sanctions. Errors affecting the amount of VAT payable are particularly significant
The consequences of errors may include:
- The need to issue a corrective invoice
- Additional settlements in the tax records
- Potential sanctions from the inspection authorities
- Problems with VAT deduction for the buyer
- Difficulties in settling tax-deductible costs
A business issued a final invoice without taking into account an advance received earlier equal to 30% of the order value. As a result, the buyer paid the full amount of the final invoice, which meant an overpayment. A corrective invoice had to be issued and the overpayment refunded, which caused additional administrative costs and delays in settlements.
To avoid errors, it is worth introducing control procedures that cover checking all details of the final invoice before it is issued and regularly reconciling settlements with contractors.
