Back to the insights archive
Tax updates

Split payment may become partially mandatory

According to the plans of the Ministry of Finance, split payment will become mandatory in certain categories.

According to the plans of the Ministry of Finance, split payment will become mandatory in certain categories.

Currently, the system is based on voluntary principle.

A representative of the Ministry of Finance referred to the European Commission's consultation on this issue.

According to the plans of the Ministry of Finance, split payment will become mandatory in certain categories. Currently, the system is based on voluntary principle. A representative of the Ministry of Finance referred to the European Commission's consultation on this issue.

The government intends to cover mandatory split payments in areas where there is a high risk of VAT fraud. However, it is not known which areas are specifically concerned. It was initially planned that the changes would come into force at the beginning 2019

The split payment is one with tools intended to seal VAT. Making a fee in the split payment system is spread over two various bank accounts. On one of which there is a VAT-free charge, second the account is transferred to the VAT amount itself. The amount in the VAT account is ‘locked’, i.e. it can only be used to pay VAT to the competent tax authority or to pay the amount of VAT to the counterparty (for another VAT account in the split payment system).

This method is intended to counter VAT fraud (e.g. the so-called disappearing taxpayer). However, there is no doubt that the negative impact on the liquidity of entrepreneurs is a disadvantage. Without split payment, VAT can be available in practice for several weeks (before being transferred to the tax office).

Author:

Expert Russell Bedford

Continue exploring our insights.

View the full archive
Tax updates

Judgment of the Court of Justice of the European Union,

The subject of the possibility of a liability being regulated by another person (a different entity) than the taxpayer or tax payer has been controversial for many years.

Tax updates

tenant Non-formal relationships and collateral for common renovation

Nowadays, more and more people who are not in formal relations decide to jointly invest in renovation, for example by borrowing.

Tax updates

Investor Desk, Interpretation 590 – new solutions of the Ministry of Finance for the largest investors

The Ministry of Finance takes action to encourage foreign investors.