Split payment was introduced by the Act of 9 August 2019 on Amendments to the Act on Goods and Services Tax and Certain Other Acts. It applies to the following transactions:

  • business-to-business transactions,
  • transactions in goods and services listed in Appendix No. 15 to the Act of 11 March 2004 on Goods and Services Tax,
  • transactions amounting to at least PLN 15,000 or its equivalent in another currency.

 

Split payment does not apply to card or cash transactions.

 

Orders executed using the split payment mechanism are settled automatically, which means that a split payment transfer is automatically broken down into the net amount and the VAT amount. We then book the amounts in the settlement account and in the VAT account, respectively. We execute all split payment orders using the settlement account (split payment transaction data are always presented in the settlement account history).

 

Since 1 November 2019, businesses have been obliged to use split payment. Invoices must contain the phrase “split payment mechanism” in the following cases:

  • when paying one invoice or several invoices at once (batch payment) amounting to at least PLN 15,000.00 or its equivalent in another currency,
  • if at least one item in an invoice or one of the invoices in a batch payment concerns goods or services listed in Appendix No. 15 to the Act of 11 March 2004 on Goods and Services Tax.

The Act provides for sanctions for businesses failing to comply with these obligations.

 

A business owns the funds accumulated in its VAT account, but it cannot use them freely. The funds can be:

  • used to pay the VAT,
  • used to settle liabilities due to counterparties (only the VAT amount indicated in the invoice),
  • transferred to another VAT account owned by the business,
  • used to pay contributions to the Social Security Institution (ZUS), Agricultural Social Insurance Fund (KRUS) PIT, CIT, excise duty, customs duty, and other taxes and fees specified in the Banking Law Act of 29 August 1997.

 

We can transfer funds from a business’s VAT account to its settlement account only on the basis of a relevant decision of the National Revenue Administration.