This is a follow up to derogation decision that granted Poland right to introduce mandatory split payment.
According to the annex to the draft legislation, the split payment mechanism will obligatorily be applied to 150 product and service groups defined in accordance with the Polish Classification of Products and Services (PKWiU) from 2008.
In general, the following groups of goods and services can be distinguished:
There are numerous sanctions that can be imposed for lack of compliance with using split payment when it is required. In case of:
Taking into account the risk of imposing significant sanctions, both on the part of the supplier and the buyer, it will be crucial to properly identify the transactions covered by the obligatory split payment method and then comply with this regime.
However, there are doubts about the transaction value, i.e. how to determine what triggers the 15 000 zl transaction limit (is this amount based on individual invoice, transaction group, payment) and how to identify certain goods and services covered by the mandatory split payment. Specifically, the way car and motorcycle parts were mentioned (as a reference to type of activity being wholesale and retail trade) will cause significant interpretation troubles for automotive industry.
The legislator planned that rules on the obligatory split payment become effective from 1 September 2019. Some provisions (for example PIT / CIT sanctions related with not using split payment) will take effect from January 1, 2020.
In order to avoid sanctions and possible personal liability, every taxpayer who purchases or sells goods or services covered by the mandatory split payment should be prepared for introduction on this regime.
Such preparation should include at least:
If your booking, invoicing or payment processing is done via SSC, it will be particularly important to initiate changes of these processes early enough.
Another important matter is solvency. With cash flow impact by receiving only net values on regular accounts, funds accumulated on VAT account could become significant challenge over time. Especially business that are on VAT refund position should be aware of this.
If you believe your business might be impacted by the upcoming mandatory split payment we encourage you to contact us in order to discuss this in a more details.