The rules for issuing invoices in Poland are specified in Art. 106a-106q of the Polish VAT Act (Journal of Laws of 2023, item 1570, as amended). The VAT regulations do not contain any provisions requiring Polish taxpayers to issue invoices only in Polish currency so in fact an invoice can be issued in any currency no matter what is the type of a given transaction. In art. 106e section 11 of the Act only states that tax amounts are shown in PLN. Therefore, when issuing an invoice in a foreign currency, that the tax amount should also be expressed in Polish zlotys.
The rules for converting amounts expressed in foreign currencies are specified in Art. 31a section 1 and section 2 of the VAT Act. These provisions state that if :
- the amounts used to determine the tax base are specified in a foreign currency, the conversion into Polish zloty is made according to the average exchange rate of a given foreign currency announced by the National Bank of Poland on the last business day preceding the date on which the tax obligation arises.
Moreover the taxpayers may choose the method of converting the amounts into Polish zloty according to the last exchange rate published by the European Central Bank on the last day before the tax liability arises. Currencies other than the euro shall be converted using the exchange rate of each of them against the euro),
- the taxpayer issues an invoice before the tax obligation arises, and the amounts used to determine the tax base are specified on this invoice in a foreign currency, conversion into Polish zloty is made according to the average exchange rate of a given foreign currency announced by the National Bank of Poland on the last business day preceding the day of issuing the invoice (and accordingly latest exchange rate published by the ECB).
Moreover, the taxpayer may voluntarily choose the rules for converting amounts expressed in foreign currencies into Polish zloty for the purposes of settling VAT, such as those for converting income in income tax.
In an individual interpretation of June 12, 2023, No. 0112-KDIL1-3.4012.168.2023.2.MR, the Director of KIS explained that issuing sales invoices is possible in any currency, however the VAT amount has to be always expressed also in PLN. An invoice that includes VAT in a foreign currency is a defective document. A taxpayer issuing the invoice is obliged to convert the amounts given in a foreign currency into Polish zloty. The buyer does not independently convert the VAT amount into Polish zloty. The amount of VAT deductible on his side is the amount shown on the invoice received from the supplier.
Example
A Polish company concluded a contract for the supply of a office equipment with a total net value of EUR 10,000 with VAT rate 23%. The goods were delivered on 31st of May, 2023 and on the same day the taxpayer issued an invoice in a foreign currency for the gross amount of EUR 12,300, including VAT in the amount of EUR 2300. To convert into Polish zloty the amounts used to determine the tax base and the VAT amount, the taxpayer used the average NBP exchange rate from the last business day preceding the date of tax liability, i.e. the exchange rate from May 30 this year. – PLN 4.5220.
Tax base – net value: EUR 10,000 × PLN 4.5220 = PLN 45,220 PLN.
VAT: EUR 2,300 × PLN 4.5220 = PLN 10,400.6.
The VAT amount converted into PLN was included in the invoice, while the tax base converted into PLN was included in the registration part of the JPK_VAT file.
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