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
ii) exclusion of the expense from tax
deductible costs in corporate or personal income tax
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.
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.