Poland: Obligatory split payment mechanism and white list of VAT taxpayers introduced
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Poland: Obligatory split payment mechanism and white list of VAT taxpayers introduced

Sponsored by

sponsored-firms-mddp.png
poland.jpg

The Polish Ministry of Finance is amending the VAT Act and some other acts, providing for the introduction of a mandatory split payment model for certain transactions from September 1 2019.

The Polish Ministry of Finance has recently published a bill amending the VAT Act and some other acts, providing for the introduction of a mandatory split payment model for certain transactions from September 1 2019.

The introduction of a mandatory split payment mechanism in Poland results from the derogation decision of the Council of the European Union Poland No. 2019/310. The decision provided that Poland should introduce an obligatory split payment by February 28 2022. Nevertheless, the above required the adoption of Polish legislation.

The bill provides that the mandatory split payment mechanism will apply in particular to supplies of goods and services that are subject to the reverse charge mechanism in Poland, as well as some others, as follows:

  • Steel products and scrap;

  • Construction services;

  • Consumer electronics (computers, telephones, TV sets, etc.);

  • Motor fuels;

  • Coal products; and

  • Automotive parts and accessories.

Payments using the split payment mechanism will apply to invoices documenting transactions made between taxpayers (B2B) with a one-off value exceeding PLN 15,000 ($4,000).

Failure to meet new obligations will result in serious sanctions such as:

i) VAT sanction of 100% of the amount of the tax disclosed on the invoice may be imposed on the invoice issuer just for failure to include, on the invoice, the notice 'split payment mechanism' as well as on the purchaser of goods/services who will not make the payment of VAT from the invoice in the split payment mechanism despite such an obligation;

ii) exclusion of the expense from tax deductible costs in corporate or personal income tax settlements; and/or

iii) a fine from the penal fiscal code of up to PLN 21 million.

Although the bill has set out an effective date of September 1 2019, one cannot exclude the possibility that amendments will be postponed. Legislative works on Polish mandatory split payment regulations have still not been completed and the bill may not be adopted before summer break.

White list

Surely, though, the so-called white list of VAT taxpayers will come into force in Poland by September 1 2019. The white list will have an electronic form and include, among others, bank account numbers of VATpayers.

According to the amendments, payments exceeding value of PLN 15,000 made to bank accounts not included in the list cannot be treated as tax deductible from a personal or corporate income tax perspective and will result in joint liability for VAT obligations of the supplier.

more across site & bottom lb ros

More from across our site

Despite the relief, Brazil’s government has also presented a bill which seeks to re-impose a tax burden on companies’ payroll, one local tax specialist told ITR
Jeremy Brown arrives at the firm after a near 16-year career with Deloitte
PwC could elect a woman into the senior leadership position for the first time; in other news, KPMG Australia has extended its CEO’s term
The Senate report into PwC’s scandal is titled ‘The cover up worsens the crime’
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
The firm’s tax business generated a quarter of HLB’s overall revenues in 2023
While successful pillar two implementation will require collaboration across all units, a combination of internal and external tax advice is at the centre of the effort
Binance has also been accused of manipulating foreign exchange rates via currency speculation and rate-fixing
Six individuals should have raised questions over information they received but did not breach professional standards, according to the firm
The partnership of KPMG UK has installed Holt for a second term as CEO and senior partner; in other news, a Baker McKenzie partner has sued the IRS
Gift this article