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Poland: VAT split-payment and netting rules

Poland: VAT split-payment and netting rules

Taxpayers purchasing goods—including electronics, fuels, steel, recyclable materials, car parts, or construction services—need to be aware of a requirement to settle their payments using the split-payment mechanism for value added tax (VAT) purposes. Failure to comply may result in penalties equal to 30% of the amount of the tax liability.

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The use of the split-payment mechanism is mandatory effective 1 November 2019. Read TaxNewsFlash

There is an exception for transactions settled by a “set-off” rule (referred to in the Civil Code). Recent statements by the Ministry of Finance suggest that an exemption from the split-payment requirement may not apply to multilateral netting.

However, taxpayers purchasing goods or services that are subject to mandatory split-payment treatment but that use multilateral netting or similar non-cash forms of settlement in their accounts (including undue liabilities) need to consider whether they are in compliance with the rules.


Read an October 2019 report [PDF 232 KB] prepared by the KPMG member firm in Poland

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