Date 1 July 2018 the provisions of the Goods and Services Tax Act on the voluntary application of the split VAT payment method apply. The Ministry of Finance has issued tax explanations to clarify a number of doubts about the entry of this mechanism.
On 29 June 2018 The ministry released a comprehensive document to answer a number of questions related to the split payment. Unfortunately, it does not solve all problems. If you have any doubts about the application of the split payment mechanism, please contact us.
Split payment is a new legal solution concerning the specific method of payment through bank accounts or credit unions, due to claims documented in the VAT invoice.
The basic assumption of the split payment mechanism is to separate payment by transfer into an amount corresponding to the amount of VAT shown on the invoice, which goes to the supplier's special account, i.e.
the VAT account, and to the amount corresponding to the net sales value shown on the invoice, which is transferred to the billing account linked to the VAT account.
Scope of the split payment mechanism
The distribution of payments is carried out at the level of banking or credit institutions. Split payment can only be used for non-cash payments by credit transfer or direct debit, but it will not apply to cash, card, offsetting or offsetting payments.
You cannot make a transfer through the above mentioned mechanism in a currency other than Polish. The split payment mechanism applies only to B2B accounts, in respect of transactions by VAT taxable persons to other VAT taxable persons. It is not possible to apply it in B2C relationships.
This mechanism cannot be used to pay for activities or events outside the scope of VAT and for VAT-exempt benefits taxed at a rate 0% VAT or under reverse charge.
How does split payment work?
The split payment method will be decided by the buyer. It has an initiative in this area. It also has the possibility to pay only part of the invoices by applying the split payment mechanism. The taxpayer does not need to inform about the application of the tax office mechanism or its counterparties. The VAT account shall be automatically assigned to company accounts relating to business activity without having to apply for establishment.
It can be said that this is a special purpose account because the funds collected on it can be used for purposes specifically indicated in the Act, inter alia:
- • payment of the amount of VAT due resulting from the VAT return to the account of the tax office (payment of the VAT liability),
- • payment of VAT resulting from invoices for goods or services purchased using the split payment method (payment to supplier),
- the transfer (rebooking) of the amount of VAT indicated to the corporate billing account, after having lodged an application with the head of the US and verified the return. In this respect, it shall issue a decision accordingly (within the time limit 60 days).
If the account holder wishes to make payment for purchased goods and services using split payment, he must complete a dedicated transfer message with the following information:
- • the invoice number on which the payment is made,
- • gross amount payable,
- • VAT amount resulting from the invoice,
- • the number by which the supplier is identified for tax purposes (e.g. NIP, EuroNIP).
The VAT account may be charged for the purpose of carrying out a seizure on the basis of an administrative implementing title concerning the enforcement of VAT claims.
Payment through the split payment mechanism does not apply to collective transfers as it must be linked to a specific invoice. For personal billing accounts, often used by micro entrepreneurs, it will not be possible to open a VAT account. Consequently, it will also not be possible to record payments received using a transfer message. Such payments will be returned to the buyer's account.
Welcome to Split Payment Training
Request for authorisation to transfer funds from the VAT account
The VAT payer may request the head of the tax office to authorise the transfer of funds collected in the VAT account for free disposal. The application shall contain:
- • the VAT account from which the funds are to be released;
- • a billing account or an account in the SKOC to which funds from the VAT account are to be transferred (this may only be a billing account or an account in the SKOC for which that VAT account is kept);
- • the amount of funds collected in the VAT account to be transferred to the clearing account or to the SCOD account.
The warden of the tax office has 60 the date of receipt of the request for consent or refusal to transfer funds from the VAT account.
Author:
Aurelia Ulita
Consultant in tax advisory. From 2017 associated with Russell Bedford Poland. Graduated from the Faculty of Law and Administration of Maria Curie-Skłodowska University in Lublin. She gained her professional experience in renowned Lublin tax law firms. Its professional interests are tax law and, in particular, income taxes.