This is a follow up to derogation decision that granted Poland rights to introduce mandatory split payment for selected goods and services in Poland.
The split payment mechanism will be applied to 150 product and service groups determined in accordance with the Polish Classification of Products and Services (PKWiU) of 2008.
In general, the following groups of goods and services can be distinguished:
Failure to comply with the provisions may impose sanctions on both the supplier and the buyer. In case of:
Given the risk of high sanctions being imposed, both for the supplier and the buyer, it will be crucial to correctly identify the transactions covered by mandatory split payment and to identify and settle them correctly.
The legislator has planned that the mandatory split payment will become effective from November 1, 2019. Some provisions (including CIT / PIT sanctions related to the lack of split payment payments) will apply 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 issue is the analysis of the impact of this mechanism on the liquidity of entrepreneurs. Mandatory split payment can not only reduce free access to financial resources, but also cause them to accumulate on the VAT account.
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.