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Split payment of VAT in Poland

From July 1st, 2018 new tax regulations in Poland enter into force. The amendments are related to introduction of split payment method with regard to VAT. Similar solutions were introduced earlier in Turkey, Czech Republic or Italy. The introduction of split payment to Polish tax law is aimed to secure more revenues to the state budget from VAT.

What is split payment?

The split payment allows exercising two separate payments related to the amount credited in single invoice. The first payment is a net amount, transferred by the recipient of the service to the provider. The second payment is a VAT amount, transferred to appropriate Tax Office. Split payment can be applicable only in B2B transaction. The payment can be exercised only in Polish currency.

Benefits and threats

The Ministry of Finance indicates, that application of split payment will led to the possibility of faster VAT-returns. It will also helps to avoid the threat of payment the interests for tax arrears. The split payment will also release the taxpayer from the liability. On the other hand, there are several threats related to the new regulations. One of them is the increase of the amount of transactions, another threat is that only the receiver of the service can decide whether to take advantage from the split payment or not.

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Author team leader DKP Legal Piotr Putyra
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