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Poland: VAT mandatory split-payment mechanism from 1 November 2019

Poland: VAT mandatory split-payment mechanism

Poland’s value added tax (VAT) law, as amended, provides the requirement to use the split-payment mechanism for selected transactions is effective 1 November 2019.


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The final provisions differ significantly from the measures in the draft law. The following discussion provides an overview of the new requirement. 


The split-payment mechanism has been available since 1 July 2018; however, it has applied on a voluntarily basis. It is the buyer that decides whether it will pay using the split-payment mechanism, so the net amount would be transferred to the regular bank account, whereas the VAT amount would be transferred to the so-called "VAT account”.

Effective 1 November 2019, the mechanism is required for selected categories of supplies of goods and services. As a rule, the split-payment mechanism will apply to domestic sales that are currently accounted for based on the reverse-charge rule (e.g., delivery of steel bars, mobile phones, waste collection, and secondary raw materials) and sales that are covered by the joint and several liability of the buyer (such as deliveries of fuel, steel pipes). Also, the mandatory split-payment treatment is to apply to the supply of construction services.

In addition, the mandatory split-payment mechanism is to be applied to new categories of goods, including parts and accessories for motor vehicles, coal and coal products, and television sets.

Only for payments above a threshold amount

The mandatory split-payment mechanism applies to payments for invoices for selected goods and services (mentioned in Appendix no. 15 to the VAT Law) exceeding a threshold of PLN 15,000 gross (approximately U.S. $3,766).

Regulations governing the joint and several liability of the buyer are to be amended.

VAT penalties for noncompliance

An invoice with a value exceeding PLN 15,000 gross, documenting sales covered by the mandatory split-payment rule, must include an annotation mechanizm podzielonej płatności ("split-payment mechanism"). The lack of this designation on the invoice can result in penalties—an additional tax liability (VAT sanction) on the seller in the amount equal to 30% of the VAT amount resulting from the invoice. Also, a 30% sanction can be imposed on a buyer that, despite the requirement to make a payment under the split-payment mechanism, paid the amount in a different way.

The penalty may not be imposed in instances when: (1) despite of lack of annotation "split-payment mechanism" on invoice, the purchaser pays using the split-payment mechanism; or (2) despite the fact that the payment was not made under the split-payment mechanism, the seller accounts for the entire VAT amount under the mechanism.

A payment made without using the split-payment mechanism does not constitute a tax cost for individual (personal) income tax and corporate income tax purposes. 

Single "payment message" for multiple invoices

The new rules allow for the possibility of making payments for more than one invoice via a single payment message, but this is subject to certain restrictions. The payment message must cover all invoices received by the taxpayer in a given period from a single supplier.

Other changes

Other measures to consider concern other areas such as individual (personal) income tax, corporate income tax, excise tax, and customs duties that may be satisfied with funds from the VAT account and the requirement for a Polish bank account for taxpayers (including foreign taxpayers) using the split-payment mechanism.

Read a September 2019 report [PDF 225 KB] prepared by the KPMG member firm in Poland

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