Issuing invoices in advance is a practice that is becoming more popular among businesses, especially as a way of managing liquidity. Current tax rules allow an invoice to be issued even before goods are supplied or services are provided, which can bring certain business benefits. However, the practice also carries significant legal and tax risk, which every business owner should understand well before deciding to invoice early. Our accounting services cover recording such invoices in the VAT registers and JPK files.
Issuing invoices in advance is a controversial issue in the Polish tax system. On the one hand, the rules clearly set out the possibilities and limits of this practice; on the other, the interpretations of the tax authorities often differ from the position of the administrative courts. This discrepancy creates legal uncertainty that can lead to costly tax disputes.
Basic rules on invoice issue deadlines
The rules on invoice issue deadlines are set out in detail in the VAT Act. Under Article 106i(1) of the VAT Act, the basic deadline for issuing an invoice is 15 days from the end of the month in which the goods were supplied or the service was performed. This rule applies in standard situations where payment follows completion of the transaction.
The situation becomes more complicated when payment is made before the supply or service. Article 106i(2) of the VAT Act states that if all or part of the payment was received before the goods were supplied or the service was performed, the invoice must be issued no later than the 15th day of the month following the month in which all or part of the payment was received from the buyer.
Invoices may be issued earlier, but no earlier than 60 days before the goods are supplied or the service is performed. The same limit applies where payment is received before the transaction is completed. Exceeding this limit may lead to the invoice being treated as an empty invoice
Article 106i(7) of the VAT Act is crucial, as it introduces an important time limit on issuing invoices in advance. This provision prohibits issuing an invoice earlier than 60 days before the goods are supplied or the service is performed, and where all or part of the payment is received before the supply or service – earlier than 60 days before that payment is received. Under Article 106i(8), the limit counted from the supply or service does not apply to invoices for activities settled periodically (Article 19a(3), (4) and (5) point 4 – e.g. rent, utilities, telecommunications services) if the invoice states which settlement period it relates to. From 2026 invoices are, as a rule, issued in KSeF (National e-Invoicing System) (Article 106ga(1)), and a structured invoice is deemed issued on the day it is sent to the system (Article 106na(1)) – so the 60-day limit is counted from that date. Regardless of the issue date, an invoice must contain all the required details – for exempt sales, also the legal basis for VAT exemption on an invoice.
Issuing an invoice in breach of the 60-day limit may be treated by the tax authorities as issuing an empty invoice. In that case the taxpayer will have to pay the VAT shown on the invoice, regardless of whether the transaction was ultimately carried out
The rules also set out the consequences of issuing an invoice in breach of the deadlines. Article 108(1) of the VAT Act provides that any legal person, organisational unit without legal personality or natural person that issues an invoice showing an amount of tax must pay that tax. This rule concerns so-called empty invoices and requires the issuer to pay the VAT regardless of the circumstances in which the document was issued.
Risks of issuing invoices in advance
Issuing invoices in advance involves a number of risks that can have serious financial and legal consequences for businesses. The most important are the risk of the invoice being treated as empty, having to pay VAT even though the transaction did not take place, and possible disputes with the tax authorities. Errors on purchase invoices cause trouble too – one example is settling Amazon invoices with the wrong VAT rate.
The tax authorities take a strict position on issuing invoices in advance. In their interpretation, if after the invoice is issued the goods are not supplied or the service is not performed within 60 days, or if payment is not made within that period, and the invoice was issued more than 60 days before the planned event, Article 106i(7) of the VAT Act is breached.
If the 60-day limit is breached, the tax authorities may apply Article 108(1) of the VAT Act and treat the invoice as empty. This means having to pay the VAT shown on the invoice, even if the transaction was not carried out or was carried out late
The basic remedy for problems with invoices issued in advance is a corrective invoice. Under Article 106j(1) of the VAT Act, a corrective invoice should be issued in the following situations:
- When the taxable amount or the amount of tax shown on the invoice has changed
- When goods and packaging have been returned to the taxpayer
- When all or part of the payment has been refunded to the buyer
- When an error has been found in any item of the invoice
In an individual tax ruling (KIS) of 20 December 2023 (No 0113-KDIPT1-3.4012.560.2023.2.AG), the Director of National Tax Information stated that invoices issued too early should be corrected by issuing corrective invoices. The correction should cover the taxable amount and the amount of tax, which should be reduced to zero. The ruling was set aside by the WSA (Voivodeship Administrative Court) in Kraków in a judgment of 29 April 2024 (I SA/Kr 225/24)
The consequences of not correcting invoices issued too early may be serious. If the taxpayer does not correct invoices issued in breach of Article 106i(7) of the VAT Act, they will have to pay the tax shown on them under Article 108(1) of the VAT Act, regardless of the reason why the invoice was issued incorrectly.
Position of the administrative courts
The administrative courts take a much more liberal approach to issuing invoices in advance than the tax authorities. Their case law reflects a different understanding of the rules on empty invoices and the tax point.
In a judgment of 21 June 2023 (I FSK 686/19), the NSA (Supreme Administrative Court) held that the obligation to pay tax under Article 108 of the VAT Act arises solely from issuing an empty invoice. The provision is preventive and is meant to stop unreliable invoices from entering circulation, from which dishonest businesses could claim the right to deduct input VAT. It is also worth knowing who can issue an invoice under the rules.
According to the NSA, if an invoice documents a real business event subject to tax, the mere fact that it was issued too early does not give rise to an obligation to pay tax under Article 108 of the VAT Act. Such an invoice should be recorded and settled under the general rules
The key distinction is between invoices documenting real business events and empty invoices. The NSA stresses that issuing an invoice too early has no effect on when the tax point arises. As a rule, under Article 19a of the VAT Act the tax point arises when the goods are supplied or the service is performed, or when payment is received before the supply (section 8), not when the invoice is issued. The exception is the activities under Article 19a(5) points 3 and 4 (including construction services, rent and utilities), for which the tax point arises when the invoice is issued.
The administrative courts also point out that where an invoice documenting a real business event is issued too early, there is no need to issue a corrective invoice. The NSA argues that none of the circumstances listed in Article 106j of the VAT Act that would require such an invoice to be corrected occurs.
In its judgment of 21 June 2023 the NSA stated that issuing an invoice too early is not an error in the content of the invoice as regards the date of supply. The invoice will document a real business event which, as a rule, is subject to tax
The NSA took a similar position in judgments of 13 September 2022 (I FSK 434/19), 14 March 2023 (I FSK 2093/18) and 21 April 2023 (I FSK 229/20). This established line of case law shows the consistent approach of the highest court to issuing invoices in advance.
Differences in interpreting the rules
The fundamental difference between the position of the tax authorities and that of the administrative courts concerns the interpretation of the concept of an empty invoice and of the tax point. This discrepancy creates legal uncertainty that can lead to costly tax disputes.
The tax authorities assume that any breach of the 60-day limit set in Article 106i(7) of the VAT Act automatically means the invoice is empty within the meaning of Article 108 of the VAT Act. In their interpretation, what matters is formal compliance with the deadlines, not the real nature of the transaction documented.
The administrative courts, on the other hand, focus on the substance of the invoice and of the business event it documents. In their interpretation, an empty invoice is a document that does not correspond to any real business event, not every invoice issued in breach of the formal deadlines.
Despite the established and consistent case law of the highest administrative court, the tax authorities still take the view that an invoice issued too early is the same as an empty invoice. This divergence of interpretation calls for particular caution from taxpayers
The practical consequences of this divergence are significant. A taxpayer who decides to issue an invoice in advance beyond the 60-day limit must reckon with the possibility of the tax authority opening tax proceedings. Even if an administrative court ultimately rules in the taxpayer's favour, the process can be long and costly.
Practical aspects of issuing invoices in advance
Issuing invoices in advance can bring certain business benefits, but it requires careful planning and risk management. Businesses considering this practice should analyse both the potential benefits and the related risks.
The main benefits of issuing invoices in advance include:
- Better liquidity through faster payments
- Better management of the cash cycle
- Giving the counterparty the document earlier so it can plan the payment (it may, however, deduct VAT no earlier than for the period in which the tax point arises – Article 86(10))
- Easier financial planning and budgeting
- Faster settlement processes
However, these benefits must be weighed against the potential risks:
- Risk of the invoice being treated as empty by the tax authorities
- Having to pay VAT even though the transaction did not take place
- Possible disputes with the tax authorities
- Costs of administrative and court proceedings
- Legal uncertainty resulting from conflicting interpretations
Taxpayers considering issuing invoices in advance should take particular care to observe the 60-day limit set in Article 106i(7) of the VAT Act. Exceeding this limit significantly increases the risk of problems with the tax authorities
It is also crucial to document transactions properly and prepare for possible tax audits. Taxpayers should keep detailed records confirming the real nature of the transactions documented and their final completion.
Recommendations for businesses
Given the complexity of issuing invoices in advance and the differences in interpreting the rules, businesses should take a cautious approach to this practice. The following recommendations can help reduce the risk:
- Strictly observe the 60-day limit set by law
- Keep detailed records confirming the real nature of transactions
- Regularly monitor order and delivery dates
- Prepare procedures for correcting invoices if problems arise
- Consult tax advisers before introducing early invoicing
A manufacturing company decided to issue invoices in advance to improve its liquidity. It introduced a deadline monitoring system that automatically reminds staff about upcoming delivery dates and the possible need to correct invoices. As a result, it avoided problems with the tax authorities while achieving the financial benefits it expected.
Businesses should be particularly careful where a transaction may be delayed or cancelled. In such cases a corrective invoice may need to be issued quickly to avoid problems with the tax authorities
It is also important to follow changes in the rules and case law on issuing invoices in advance systematically. The evolution of legal interpretations may affect the assessment of the risk involved in this practice.
| Aspect | Position of the tax authorities | Position of the administrative courts | Practical recommendations |
|---|---|---|---|
| Time limit | Strict 60 days | No effect on the tax point | Observe the 60 days |
| Empty invoices | Every breach of the limit | Only invoices without a real transaction | Document transactions |
| Corrections | Mandatory in case of breach | Not required for real transactions | Prepare procedures |
| Tax risk | High | Low for real transactions | Cautious approach |
