Poland: Split Payment mandatory from 1 November 2019

Jul 31, 2019 | VAT Updates

Polish Parliament has approved the mandatory Split Payment Mechanism and it will come into force November 1, 2019. After being postponed earlier this year from July to September, the SEJM had voted in favor and passed the measure (1).

The Split Payment Mechanism is another attempt from the Polish Government to fight VAT fraud and will replace Reverse Charge. Under the new mechanism, Polish tax payers, including non-resident companies, will be required to open a special VAT account with Polish banks where the invoiced VAT amount should be deposited. This split VAT payment mechanism will only apply to B2B supplies made by electronic bank transfers.

The mentioned special VAT account can be used for restricted purposes only, for example payments of the VAT liability to the tax authority or the payment of VAT on invoices received from suppliers (2).

The mandatory requirement will only apply to transactions above PLN 15,000 (€3,500 approximately) for the following products:

  • Steel products, precious metals, non-ferrous metals;
  • Waste, scrap, recyclable materials;
  • Electronics, specifically: processors, smartphones, phones tablets, net-books, laptops, game consoles, inks, toners, hard drives;
  • Fuels for cars, fuel and lubricating oils;
  • Greenhouse gas emission rights;
  • Building and construction services;
  • Coal
  • Sale of car and motorcycle parts;

If you believe these developments impact your business and would like further advice on your next steps you can always contact us.

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