VAT mandatory split-payment mechanism from 1 November 2019

Poland’s Value Added Tax law makes the use of the split-payment mechanism obligatory for selected transactions effective 1 November 2019.

From 1 November 2019 the split-payment mechanism will apply to domestic sales that are currently accounted for based on the reverse-charge rule (e.g., delivery of steel bars, mobile phones, waste collection, and secondary raw materials) and sales that are covered by the joint and several liability of the buyer (such as deliveries of fuel, steel pipes). Also, the mandatory split-payment treatment is to apply to the supply of construction services.

In addition, the mandatory split-payment mechanism is to be applied to new categories of goods, including parts and accessories for motor vehicles, coal and coal products, and television sets.

Only for payments above a threshold amount

The mandatory split-payment mechanism applies to payments for invoices for selected goods and services (mentioned in Appendix no. 15 to the VAT Law) exceeding a threshold of PLN 15,000 gross (approximately U.S. $3,766).

Failure to comply with the provisions may impose sanctions on both the supplier and the buyer.

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