New rules for the split payment apply from 01/11/2019. This mechanism is based on the fact that the buyer can only transfer a net amount to the current account of the seller. The VAT is transferred to a special VAT bank account. The funds in the VAT bank account belong to the seller, but cannot be freely disposed. The funds may be used in particular to settle tax or other public law liabilities. A VAT bank account is automatically opened by the Tax Office, but this does not apply to foreign entities that do not have a bank account in Poland.
The split payment mechanism is mandatory as of 01/11/2019 for transactions documented by invoices issued in the amount exceeding PLN 15,000 gross and concerning among others:
• construction works;
• secondary raw materials and waste;
• electrical equipment;
• engine petrol, diesel oils, heating oils and lubricating oils;
• steel and metal products.
If the new rules are not applied, the Tax Office may impose an additional tax obligation or the VAT-tax payer may bear the consequences resulting from the Fiscal Penal Code. At your request, we will be happy to check whether you are subject to the mandatory split payment mechanism and whether your invoice templates and payment processes are adapted to this.
Author: dr. Małgorzata Stępień, radca prawny, doradca podatkowy