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Poland: Proposal to require VAT split-payment mechanism

Poland: Proposal to require VAT split-payment mechanism

The Ministry of Finance has proposed legislation that would require for certain transactions application of the “split-payment mechanism” for purposes of value added tax (VAT) remittances. The effective date would be 1 September 2019.


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Under the split-payment mechanism, the net amount of a sale is transferred to a regular bank account, with the amount of VAT being transferred to a designated "VAT account." The split-payment mechanism has been available on a voluntary basis since July 2018, with the buyer deciding whether to apply the split-payment mechanism.

Under the proposal, effective 1 September 2019, the split-payment mechanism would be mandatory for selected categories of supplies of goods and services, including:

  • Domestic sales that are currently accounted for under the reverse-charge rule (e.g., delivery of steel bars, mobile phones, waste, secondary raw materials)
  • Sales that are covered by the joint-and-several liability of the buyer (such as deliveries of fuel, steel pipes)
  • Supplies of construction services
  • Parts and accessories for motor vehicles
  • Coal and coal products
  • Television sets

The draft proposal would provide a threshold of PLN 15,000 for the mandatory split-payment mechanism to be triggered. Failure to apply the split-payment mechanism when required would be subject to a penalty equal to 100% of the amount of VAT.

Read a June 2019 report [PDF 256 KB] prepared by the KPMG member firm in Poland

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