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Retention of invoices, receipts and tickets in scanned form does not deprive the taxable person of the right to VAT deduction


In the binding ruling issued on 19 October 2015 (ref. no. IBPP2/4512-718/15/BW), Director of the Fiscal Chamber in Katowice confirmed that invoices retained by the taxable person in electronic form (i.e. as scans) in accordance with the archiving procedure presented in the application, provided that origin authenticity, content integrity and legibility of such invoices is ensured, in principle authorise the taxable person to deduct input VAT disclosed in such invoices from output VAT. The condition is that the acquired goods and services are used for transactions chargeable with VAT and at the same time the negative premises set forth in Article 88 of the VAT Act, rendering VAT deduction impossible (e.g. invoices documenting transactions which are not chargeable with VAT), are not applicable.

The company applied to the Minister of Finance in connection with its plans to change its procedure of document flow and archiving. The procedure intended for implementation assumes minimising the costs by retaining all or a part of invoices and receipts as well as other similar documents (e.g. tickets) in electronic form (i.e. as electronic files created after scanning documents, with strictly specified file extension), and applies to the retention of documents that in principle underlie reimbursement of expenses incurred by the company employees. Scanned documents are to be legible and complete, and it will be possible to print or save them on a data carrier at any time. The procedure also assumes that documents will be archived by settlement periods so that they may be easily tracked – also by using a reference number or employee number, and access to the files will be restricted to selected persons only, while technically it will not be possible to delete a file after the related expense has been approved. Following approval of the expense, document in paper version is to be destroyed.  

In the opinion of Director of the Fiscal Chamber, description of the presented procedure indicates that the requirements concerning origin authenticity, content integrity and legibility of the invoice, as referred to in Article 106m.1 of the VAT Act, will be satisfied, and according to regulations such requirements may be ensured by any business controls which establish a credible audit path between the invoice and the supply of goods or the provision of services. What is important, invoice origin authenticity should be understood as certainty about the identity of the supplier of goods or the service provider or the invoice issuer, whereas invoice content integrity should mean that no data required to be included in the invoice has been changed. As was indicated by the authority, the notion of said business controls should be understood as the process through which the taxable person creates, implements and updates the sufficient level of certainty regarding the identity of the supplier or the service provider or the invoice issuer (authentic origin), regarding the fact that no VAT data has been changed (integral content) and regarding invoice legibility from the moment of its issue up to the end of the retention period. So business control should render it possible to connect the invoice with the underlying supply or service. The authority also pointed to some individual character of business controls, i.e. adjusting them to the activities pursued by the business, and emphasised that a credible audit path is in place when the connection between supplementing documents (order, contract, transport document etc.) and effected transactions may be easily tracked, is in conformity with the established procedures and reflect the processes that actually happened. 

This binding ruling confirms more and more liberal position of the tax authorities as regards the retention of documents in electronic form. By implementing detailed procedures for this way of document archiving, which ensure authenticity, integrity and legibility, the taxable persons will not lose their right to deduct VAT from invoices so retained, provided that other statutory requirements in this regard are complied with.