Poland: Obligatory split payment mechanism and white list of VAT taxpayers introduced
International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX
Copyright © Legal Benchmarking 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

Nusetti, global tax head at pharmaceutical company Lupin, tells ITR about being a tax magician, military aspirations and what makes tax cool
The UK tax agency unsuccessfully argued that a software company was not entitled to R&D tax relief
Pillar two anticipation may have led to stable international corporation tax rates according to the OECD; in other news, A&M has continued its lateral hiring spree
Singapore faces controversies with many trade partners and needs to constantly keep tax guidelines up to date, a local tax expert told ITR
With HMRC’s renewed enforcement focus, it’s as important as ever for UK companies to get their NRD compliance affairs in order, writes Lewin Higgins-Green of FTI Consulting
Senator Richard Colbeck’s remarks follow news that PwC Australia CEO Kevin Burrowes receives a salary of A$4 million, more than previously disclosed
Adam Frais will assume his new role on October 1 and will lead BDO’s 1,000-strong UK tax business
It comes after a decree which introduced a qualified domestic minimum top-up tax last year
The UK Upper Tribunal’s pragmatic approach to anti-abuse provisions will be welcomed by the secondary debt market, say Matthew Greene and Guy Bud of Stewarts
The party should aim to reduce corporation tax from 25% to 15%, one partner told ITR
Gift this article