Polish Government publicized the draft of the new VAT Law implementing the obligatory split payment. The obligatory split payment will apply to the goods and services to which currently the obligatory reverse charge applies but not only. The list of the goods and services to which the obligatory split payment will apply will be covered by the new Annex to VAT Act (no 15). The Annex no 15 is consistent with the list of the goods and services covered by the Annex to the EU Council implementing decision No. 2019/310 authorizing Poland to introduce a obligatory split payment mechanism. The full text of the EU Council implementing decision is available at this link.
The foreign taxpayers, who will carry out supplies covered by the obligatory split payment, will be obliged to open the bank account in the bank established in Poland. The costs of maintenance of this bank account can be refunded by the Polish tax office.
The obligation to use the split payment will apply only to transactions exceeding PLN 15,000 gross (and to the goods and services covered by Annex no 15 to Polish VAT Act).
The invoices documenting transactions covered by the obligatory split payment must contain the following clause in Polish „mechanizm podzielonej płatności” (in English “split payment mechanism”). If the invoices do not cover this note, the taxpayer will be charged with penalty sanction equal to 100% of VAT indicated on the invoice.
Sanctions will also apply to buyers who despite of existing obligation will be avoiding splitting the payment. The buyer who does not split the payment if the split is obligatory will be charged with penalty sanction equal to 100 % of VAT indicated on the purchase invoice. Moreover, the net amount of the invoices could not be treated as tax deductible for respectively CIT or PIT purposes.
What is more, the threshold for joint and several liability for VAT of the purchaser together with the supplier for supply of the goods and services covered by Annex no 15 will be PLN 12,000 net. The above liability will not be applied if the purchaser pays for VAT via split payment.
It will be possible to make payment for multiple invoices received in a period no longer than one month in one split payment transfer. The condition of that will be that this payment will have to concern all invoices received in a given period, regardless whether they were all subject to obligatory split payment or not.
According to the draft, the obligatory split payment will come into force on September 1, 2019. Whereas provisions concerning sanctions in PIT and CIT will come into force on January 1st, 2020.
