Immigration law

Split payment mechanism in the explanations of the Minister of Finance

Bearing in mind that as of January 1, 2020 all regulations, including sanctions, concerning the mandatory MPP will come into force, the Minister of Finance issued explanations on this issue. They do not contain unexpected answers or new solutions to problems, but they help to put in order the knowledge about the existence of an obligatory MPP. Below, in the subsections, some issues that have not been addressed so far, but may be important in everyday business practice from the new year onwards, are explained:

  1. Payment in MPP is currently not possible in formats other than transfer, e. g. in payment cards, transfers, bills of exchange. Taking into account the fact that Annex 15 to the VAT Act also includes computers, etc. equipment, then paying for computers „per company” should not be „paid by card”,
  2. If the transaction concerns goods or services from Annex 15, in which the taxpayer acquires from a taxpayer who does not have a place of business in Poland but is registered for VAT purposes in Poland, the obligation to apply an MPP may arise,
  3. If „split payment mechanism” that should have been included in the invoice is not reimbursed, it can be corrected by means of a correction note,
  4. The buyer must verify the object and the value of the transaction, as it is the buyer who initiates the payment and is responsible for the choice of the payment method,
  5. It is not sanctioned to include the „split payment mechanism” on the refund invoice when this is not mandatory. The purchaser is not then obliged to use the MPP,
  6. There is no obligation to include the phrase „split payment mechanism” for taxpayers benefiting from a personal exemption. However, a taxpayer who is exempted both objectively and in terms of sales value is obliged to pay in an MPP if the conditions for a mandatory MPP are met,
  7. The obligation to pay in the MPP, even if there is such an obligation, does not apply to payment of a debt seized by a bailiff or enforcement authority,
  8. In the case of foreign entities which, in connection with the operation of a mandatory MPP in Poland, are obliged to apply it and, as a consequence, have to set up a PLN account, then they are entitled to reimbursement of the costs associated with its possession,
  9. If we make payments to a factor and there are grounds for a mandatory MPP, then it should be applied,
  10. Multilateral (contractual) offsets cannot currently be considered to fulfil the obligations related to the mandatory use of MPP,
  11. Contracting for transactions in a currency other than PLN does not exempt from the obligatory MPP. Then two payments should be made: from the VAT account the amount corresponding to VAT in PLN and from the foreign currency account the net amount,
  12. Operators carrying out supplies of goods referred to in Annex 15 generally lose the possibility of accounting for VAT on a quarterly basis from January 1, 2020.
Author team leader DKP Legal
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