Polish Split Payment Mechanism In Force November 1

by Ulrika Lomas, Tax-News.com, Brussels

27 September 2019

On September 20, 2019, the Polish Ministry of Finance reminded taxpayers that the compulsory value-added tax split payment mechanism for certain supplies will commence on November 1, 2019.

Under the split payment mechanism, when a taxable person acquires goods or services from another taxable person, the portion of the payment to the supplier that is VAT will be deposited separately and automatically to a dedicated account of the seller (an r-VAT account), to satisfy the VAT required to be remitted to the tax agency. The net amount for the transaction will be received by the seller. The amount deposited in a r-VAT account will earn interest for the vendor and may be used to satisfy its VAT obligations.

The Polish split payment mechanism will be mandatory for supplies that are currently subject to the reverse charge mechanism, including:

• steel;
• fuel;
• construction services;
• European Union emissions trading allowances;
• automotive parts and accessories;
• coal and coal products; and
• electronic machinery and equipment and their parts.

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