Mandatory split payment from November 2019


On August 29, 2019, the President signed a law introducing a mandatory split payment mechanism.

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 most important assumptions:

  • obligatory split payment applies only to transactions between taxpayers (B2B), which are subject to VAT in Poland, documented by invoices in which the total amount of receivables exceeds PLN 15,000 (gross);
  • the obligation to apply the split payment mechanism will cover selected goods and services (discussed further below);
  • foreign entities settling transactions by bank transfers transactions - subject to VAT in Poland - will be required to open a bank account in Poland;
  • an obligation to place information on the invoice about the use of the obligatory split payment mechanism will be introduced,
  • bulk payments will be possible (for several invoices as part of one transfer),
  • funds from the VAT account can be used to regulate other tax liabilities (PIT, CIT, excise duty, customs duty) and social security (ZUS) contributions.

Detailed information:

Goods and services covered by the mandatory split payment

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:

  • steel products, precious metals, non-ferrous metals;
  • waste, scrap, recyclable materials;
  • electronics, specifically: processors, smartphones, phones, tablets, netbooks, laptops, game consoles, inks, toners, hard drives;
  • fuels for cars, fuel and lubricating oils;
  • greenhouse gas emission rights;
  • building and constructions services;
  • coal;
  • sale of car and motorcycle parts.

Sanctions for lack of compliance

Failure to comply with the provisions may impose sanctions on both the supplier and the buyer. In case of:

  • failure to include in the invoice content information that a given transaction is subject to a split payment regime, the invoice issuer may receive a penalty equal to 30% of the VAT value resulting from such invoice (compared to the first version of the draft, this penalty was reduced from 100%). However, the law clarifies that this sanction will not apply if - despite the fact that MPP is not included in the invoice - the buyer has paid the VAT amount using the split payment mechanism;
  • failure to pay in the split payment regime, the buyer may receive a penalty equal to 30% of the value of VAT resulting from such an invoice (compared to the first version of the project, this penalty was also reduced from 100%). However, the law indicates that this sanction would not apply if the seller accounted for the entire tax resulting from the invoice paid in breach of this obligation;
  • failure to pay in the split payment regime, the buyer will not be entitled to include the amount of the expenditure (CIT / PIT) as tax deductible. According to the introduced law, this sanction will only apply if the payment is made without the mechanism despite the fact that the invoice was correctly marked (ie it contained the endorsement 'split payment mechanism');
  • failure to pay in the split payment regime, the person responsible for such a situation will be subject to sanctions under the Fiscal Penal Code (up to 720 daily rates).

Important matters

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.

Entry into force

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.

Necessary actions

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:

  • identification of goods and services for which split payment will have to be used (AP),
  • identification of goods and services for which a VAT invoice issued should contain the information “split payment mechanism" (AR),
  • changes in the way payments are made to take account of the obligation to use a VAT account.

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.


Contact us

Tomasz  Kassel

Tomasz Kassel

Managing Partner, Tax, Legal & People, PwC Poland

Tel: +48 502 184 846

Tomasz Pabiański

Tomasz Pabiański

Partner, PwC Poland

Tel: +48 502 184 952

Jakub Matusiak

Jakub Matusiak

Partner, PwC Poland

Tel: +48 502 184 468

Maciej Goc

Maciej Goc

Manager, PwC Poland

Tel: +48 519 506 486

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