Public country-by-country reporting by big multinationals: EU co-legislators reach political agreement

EU Council reached a provisional political agreement with the European Parliament’s negotiating team on the proposed public CbCR Directive this week.

Further details will be shared in the coming days but for now, please find the link of the press release from the EU Council.

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POLAND: Mandatory split payment as of September 1, 2019

On May 16, 2019 the Polish legislator published draft of amendments to the VAT act aimed at introducing mandatory split payment mechanism for selected goods and services in Poland. This is a follow up to derogation decision that granted Poland right to introduce mandatory split payment. Find below the most important information resulting from the draft legislation:

  • the obligatory split payment applies only to transactions made between taxpayers (B2B), which are subject to VAT in Poland and with value exceeding 15 000 zł,
  • the obligation to use the split payment mechanism will cover selected goods and services,
  • foreign entities settling transactions by means of bank transfers subject to VAT in Poland will be obliged to open a bank account in Poland,
  • new invoice layout requirements will be introduced in order to mark an invoice documenting delivery of goods / services subject to the mandatory split payment method,
  • it will be possible to cover multiple invoices with single split payment operation (collective payment),
  • funds accumulated on VAT account can be used to pay other tax liabilities (PIT, CIT, excise, customs duties) as well as social security (ZUS).


Goods and services covered by the mandatory split payment

 According to the annex to the draft legislation, the split payment mechanism will obligatorily be applied to 150 product and service groups defined in accordance with the Polish Classification of Products and Services (PKWiU) from 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, net-books, 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

There are numerous sanctions that can be imposed for lack of compliance with using split payment when it is required. In case of:

  • failure to include on the invoice information that transaction is subject to mandatory split payment regime, the invoice issuer may receive a fine of 100% of the VAT value resulting from such invoice,
  • failure to pay in the mandatory split payment regime, the buyer may receive a penalty equal to 100% of the VAT value resulting from such invoice,
  • failure to pay in the mandatory split payment regime, the buyer will not be entitled to treat such cost as tax deductible (from CIT / PIT perspective),
  • failure to pay in the mandatory split payment regime, the person responsible for the occurrence of such a situation will be subject to sanctions resulting from the fiscal penal code (up to 720 daily rates).

Important matters

Taking into account the risk of imposing significant sanctions, both on the part of the supplier and the buyer, it will be crucial to properly identify the transactions covered by the obligatory split payment method and then comply with this regime. However, there are doubts about the transaction value, i.e. how to determine what triggers the 15 000 zl transaction limit (is this amount based on individual invoice, transaction group, payment) and how to identify certain goods and services covered by the mandatory split payment. Specifically, the way car and motorcycle parts were mentioned (as a reference to type of activity being wholesale and retail trade) will cause significant interpretation troubles for automotive industry.

Entry into force

The legislator planned that rules on the obligatory split payment become effective from 1 September 2019. Some provisions (for example PIT / CIT sanctions related with not using split payment) will take effect from January 1, 2020.

Necessary actions

In order to avoid sanctions and possible personal liability, every taxpayer who purchases or sells oods 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),
  • establishing rules on recognizing when 15 000 zł threshold is exceeded,
  • aligning payment and invoicing processes in order to achieve compliance with split payment rules.

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 important matter is solvency. With cash flow impact by receiving only net values on regular accounts, funds accumulated on VAT account could become significant challenge over time. Especially business that are on VAT refund position should be aware of this.

For further details please contact

Tomasz Kassel, Partner
Tel. + 48 502 184 846

Tomasz Pabiański, Director
Tel. + 48 502 184 952

Jakub Matusiak, Director
Tel + 48 502 184 468



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Tiny Switzerland and its 26 cantons

Switzerland is tiny. If you want to travel from oneborder to the most distant other border, half a day is enough and so is good.At the same time tiny Switzerland is divided into 26 cantons and they aresovereign in many matters.  It ispossible that, if you have 2 children, who go to schools in different places,possibly in another canton, only seldom do they have holidays at the same time.Moving from one canton to another is like emigrating abroad.

The registration number on your car is changed and itcan be seen in which canton you live. The longer you live somewhere, the lowerthe registration number. This gives a clear distinction between the locals andthe newcomers. Swiss drivers are not particularly considerate and patient andtherefore in large cities like Zürich it’s not long before someone, who doesnot have a Zürich registration and only one second after it has turned green atthe traffic lights has not started, is hooted at as a disturbance. Seldom doesthat speed things up but perhaps it helps the stressed driver partly to relievehis or her aggression. 

Last year I moved from one canton to another. I paidthe vehicle tax for 2019 – and that‘s quite a sum – at my old place ofresidence. After changing the registration, I had to pay the vehicle tax for2019 again. A week later, at home I received a cheque for almost the sameamount that I had paid in my new canton – but after deduction of administrativecosts. The money to be collected from the post office. As my nearest postoffice, which has only short and customer unfriendly opening hours, is close towhere I work, which is in my former canton of residence, I went to collect themoney. After I had waited for 5 minutes, I was informed that the money could becollected from a post office in my canton of residence. HELP I wanted to shout.Apart from that the cheque is valid for only one month. I looked in theInternet and on Saturday afternoon I went to the post office close to thestation in my place of residence. Only to discover that it is not open and ofcourse the letter boxes cannot cash a cheque for me. There was no time to go tothe next post office, because it was already 4.00 pm.

This week I’m working in New York and unfortunatelythere too I cannot cash the cheque. So I’m getting dangerously close to thecheque’s maturity date. God knows how I’m going to get my money.    

Norway – SAF-T introduction probably postponed till 1 of January 2019

Referring to the last information about SAF-T, I would like to come back with an update:

The Norwegian Tax Authorities have published a new statement about the possible full implementation of the SAF-T in Norway (not only as a voluntary scheme).Read More »

Poland – Standard Audit File (Jednolity Plik Kontrolny) to be introduced as per 1 of July 2016

748722_original_R_by_verbraucherpapst_pixelio.deAccording to the changes in Polish tax law, which will come into force as of 1st July, there will be a new obligation for the taxpayers to have so called Standard Audit File (in Polish: “Jednolity Plik Kontrolny” or “JPK”) – special reporting form, in a special format [determined by Polish tax authorities] that will allow tax inspectors to have an easy access to accounting / tax data / records. Read More »

Invitation: Sydney and Melbourne Virtual Round Table

PwC_Swiz_Zurich_R_MB_39.jpgI would like to invite you to our Sydney and Melbourne Virtual Round Table.

  • Sydney:         16 June 2015 at 11.00 GMT
  • Melbourne:  19 June 2015 at 09.00 GMT



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PwC Webcast: Indirect Tax Policy in a Global Economy – 18 May 2015

PwC_PC_France_Paris_MB_081.jpgI recommend our next webcast focusing on Indirect Tax Policy in a Global Economy.Read More »

Changes in the EU legislation (1)4 Ministers of culture asked for change in EU legislation to tax e-books exactly as physical books.

Read More »

Italy: reduced VAT rate of 4% on e-books from 1 January 2015

PwC_R_Vinesh.Naidoo_Yoginee.Sharma_Vernie.Slabert_SouthAfrica_Jhb_P_CW_0017.JPGThe Italian Parliament passed the 2015 Finance Law on 22 December, which applies the 4% VAT rate to e-books as of 1 January 2015. According to the legislation any publication that is identified by an ISBN code (International Standard Book Number) and transmitted through any physical or electronic means, should be considered as a book and, as a result, subject to the 4% reduced VAT rate.Read More »

Japan: new legislation to tax cross-border electronic services provided by non-established companies to come soon

Currently the B2C supply of services by a non-established company to Japanese customers is not subject to Japanese consumption tax (JCT). This provides competitive advantage to non-established service providers of electronic services compared to Japanese businesses. Since the JCT rate increased from 5% to 8%, with another increase to 10% estimated from 1 October 2015 this advantage is increasing further.Read More »