Michaela Merz

Poland – Split payment – what should you know before it goes live on 1 July 2018

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General information

To ensure greater stability of VAT revenue as well as to prevent VAT avoidance, Polish Ministry of Finance is going to introduce a split payment mechanism. Based on the recent project, split payment is assumed to be implemented as of 1 July 2018 in Poland.

The essence of the split payment mechanism is based on a division of payment for delivered goods/ rendered services into two separate parts (VAT amount and net amount) and is transferred to two separate bank accounts (standard account and dedicated VAT account). Possibility of disposing cash collected on VAT account is limited for the taxpayer (supplier).

The principle of Polish split payments

  • voluntary form (the buyer can but do not have to apply it);
  • the buyer decides and, as a rule, is entitlled to use split payment even without the supplier’s knowledge;
  • it concerns transactions between taxpayers (B2B) – even a foreign ones;
  • automatic form (technical aspects of payments division handled by banks);
  • funds on VAT accounts may be interest-bearing, depending on the parties’ arrangements
  • the Public Treasury has relatively high level of control over the supplier’s cash collected on VAT account – cash cannot be freely disposed by the supplier;
  • cash deposited on VAT account can be used mostly to pay VAT liability, additional VAT sanction and penalty interest connected with VAT or to pay VAT on the vendors’ invoices;
  • cash withdrawal on a supplier’s request is made within 60 days.

Benefits for taxpayers

  • lack of joint liability of the supplier by the buyer’s side;
  • lack of VAT sanctions [this does not eliminate the possibility of challenging the VAT deduction itself];
  • payment of VAT liability before the deadline reduces the value of VAT liability;
  • VAT refund in 25 days on VAT account;
  • potential argument in case of dealing with VAT fruds that the taxpayer acted in so’called good faith.


…even the possession by a foreign taxpayer of a bank account in a Polish bank will allow each customer to use the split payment mechanism
…an official acceptance by the supplier of using of the split payment mechanism is not needed – it is the customer’s choice only but may hardly impact the supplier’s cash flow

Key areas to be considered

  • Possessing VAT accounts in Polish banks
  • Choice of suppliers / transactions which should be subject to the mechanism
  • Identification of potential customers who may apply the mechanism towards you
  • Estimation of organizational and financial costs of new rules and identification of potential savings opportunities
  • Arrangements with customers and vendors in terms of changing terms of cooperation to clarify the principles of execution of payments under the contract
  • Estimation of the impact of the mechanism on your’s liquidity

For further information about split payment please click HERE.


Tomasz Pabiański
T: +48 502 18 4952
E: tomasz.pabianski@pwc.com

Maciej Dybaś
T: +48 519 50 7182
E: maciej.dybas@pwc.com

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