The new year brought further changes to tax laws. One of these concerns the split payment mechanism.
Amending Act which entered into force on the day 1 January 2021 contains a number of changes concerning MPP. The basic assumptions for these modifications will be presented below.
Amount from which MPP becomes compulsory
The current content of the Act indicated that MPP is mandatory when ‘the total amount of receivable represents the amount referred to in Article 19(2) Act of 6 March 2018 – Business Law". This provision created interpretation doubts. On the basis of this, it can be assumed that MPP would be compulsory only if the invoice indicates a gross amount of exactly 15,000 PLN. The amendment aims to eliminate this inaccuracy. The current record is already precise and leaves no doubt.
‘When making payment for purchased goods or services listed in Annex 15 to the Act, documented by an invoice in which the total amount of the claim exceeds the amount 15,000 PLN or its equivalent in foreign currency, taxpayers are obliged to apply the split payment mechanism. For conversion into gold amounts denominated in foreign currency, the rules for conversion of amounts used to determine the tax base shall apply.’
MPP and deductions
From 1 January 2021 new rules for excluding MPPs also apply to off-code deductions. The rationale for the law amending the clarification explains the reasons for such a change:
‘So far, the failure to apply the split payment mechanism shall only cover reciprocal deductions where both claims are due and may be brought before a court or another state authority. Direct reference to Article 498 The Civil Code therefore narrowed the deductions to which the obligation of the split payment mechanism was excluded.’
Maintaining a limitation to deductions from Article 498 KC is not justified. At the moment, it will be possible to exclude the obligation to apply the split payment mechanism also for other deductions, i.e. deductions made between persons who are not debtors and creditors (counterfeiting). In addition, both deducted claims need not be due.
VAT payments
From 1 January 2021 the possibility of payment from the VAT account of an amount corresponding to the amount of import tax on goods or customs duties on behalf of customs agencies (Article 62b(2)(3a) Banking rights).
This possibility arose as a result of the requests made and was introduced in connection with the practice in Poland of regulating customs duties and tax duties on imports of goods by customs representatives who make customs declarations to importers.
This practice has its reasons and follows, in particular, from the fact that the customs agencies usually cover the goods declared (for the benefit of importers) for the procedure of placing on the market which they hold with customs security, i.e.
guarantee payment of import duties on goods on the basis of their own licences for the lodging of general security and of the resulting ‘guarantor obligations’.
Request for the release of funds collected in the VAT account
From 1 January 2021 The VAT Act introduces the possibility for the head of the tax office to obtain permission to transfer funds collected in the VAT account by non-taxable persons.
To date, the functioning of the split payment mechanism has shown that there are cases of payments made in this mechanism to entities that are not VAT taxable. This is the case, for example, when carrying out the seizure of the claim.
New Article 108b(8)(9) The VAT Act currently allows other non-taxable entities which hold financial resources on the VAT account to apply for the release of funds. The amendment also covers entities which do not have a registered office or permanent establishment in a country which are not taxable persons.
Such entities were also concerned with the problem of transferring amounts to the VAT account.
Author: Mikołaj Stanisławski
Associated with Russell Bedford Poland since 2017. He graduated from the Faculty of Law and Administration of the University of Warsaw in 2007. From 2008 to 2011, he completed his advocate training. Since 2011, he has been admitted to the Warsaw Bar. In 2016, he completed postgraduate studies in taxation and tax law at the University of Warsaw. He specialises in tax and fiscal criminal matters.