Split payment mechanism in Poland


Since 2018, a split payment mechanism has been in effect in Poland. This is one of the methods for tightening up the tax system and reducing the VAT gap. This mechanism is still considered to be a relatively new solution. To date, it has only been introduced in a few countries in Europe. On what principles does it operate in Poland? When is its application mandatory... and when is it voluntary? Find out all about it in this article.

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Image acknowledgement: Towfiqu barbhuiya, source: unsplash.com

The draft amendment to the Tax on Goods and Services Act, which includes provisions introducing the split payment mechanism in Poland (Art. 108a–108f), was adopted by the government in September 2017. The changes entered into force one year later. In the meantime, the details of the solution were modified several times. The latest modifications, made in response to the economic situation during the COVID-19 pandemic, have been in force since 2021.

Split payment – how it works

The basic idea of the split payment system is that the payment for goods or a service is split into two parts, each of which goes to a different account. The principal part, corresponding to the net amount, goes directly to the seller’s standard account, while the sum equal to the VAT goes to a special account. The owner may use the money accumulated there only for strictly specified types of transactions.

In Poland, VAT accounts are created automatically as an additional account when a business account is opened.

Who can use the Split Payment Mechanism?

According to current Polish regulations, you may use the split payment mechanism only if you are a VAT payer and you use a bank transfer to pay an invoice in which the VAT amount is specified. However, split payment is not mandatory for every such transaction. Such an obligation arises only in strictly defined circumstances.

Mandatory Split Payment

For a given transaction to be made using the Split Payment Mechanism, two conditions must be met. First, there must be sensitive goods or services on the invoice (all from Appendix 15 to the Law on Goods and Services Tax). Second, the total amount due exceeds PLN 15,000 gross or the equivalent in foreign currencies. The issuer of an invoice that meets these conditions must mark it with the words: “mechanizm podzielonej płatności” (split payment mechanism),

The sensitive goods and services listed in the appendix to the law primarily include:

  • steel, copper, aluminium, precious metals and their products,
  • coal and solid fuels made from coal,
  • liquid fuels,
  • electronic devices and parts for electronic devices, including but not limited to: mobile phones, computers, cameras, printers and their inks and toners, processors, hard drives, and batteries,
  • motor vehicle parts,
  • secondary raw materials and waste,
  • greenhouse gas emission allowances and services related to the transfer of these,
  • all construction services.

You must remember that it is enough for only one item on an invoice for more than PLN 15,000 gross to belong to the sensitive group for the obligation to apply and the split payment to arise. However, it is up to you whether you use this mechanism to settle the whole invoice or only the sensitive goods or services.

Voluntary Split Payment

You can also use the split payment mechanism for all other invoices paid by bank transfer (if you are part of the above-mentioned group of business owners, of course).

However, your contractor can stipulate that they do not wish the split payment mechanism to be used. This requires you to transfer the gross amount to their account. Of course, this stipulation does not apply when the transaction meets the mandatory split payment requirements.

Making a payment with the split payment mechanism.

Payment with the split payment mechanism can only be made with the aid of a transfer form available on business accounts called “transfer message”. On this form, you need to include:

  • the amount of tax to be transferred to the VAT account
  • gross amount subject to split payment
  • invoice number
  • supplier’s NIP

If you receive more invoices from your contractor, you can pay them using split payment in a single transfer. In such a case, instead of the invoice number, you should enter the period during which the invoices were issued. This period cannot exceed one month. You can also make an advance payment in this way: then, in place of the invoice number, enter “advance payment”.

Remember that transfers using the split payment mechanism are only possible between the business accounts of registered VAT payers. All of these are on the so-called “whitelist”. Thanks to the search engine, you can quickly and easily verify whether the contractor’s account number is on the list and whether it is correct. Of course, your account number must also feature in the above register in order to carry out such a transaction.

When making a transfer, you should provide only one account number, as it appears on the invoice. The bank automatically divides the transferred funds and deposits them to the main account and the VAT account. At the same time, if there are any funds in the VAT account assigned to the business account from which you are making the transfer, they will be used to cover the tax amount indicated in the transfer message. If there are no funds in the VAT account, the whole amount will be transferred from the main account.

Deposits and withdrawals from the VAT account

The rules strictly define what funds can be deposited into your VAT account and what you can use the money for. See the table below for details.

Split payment table eng

If you are unable to use the funds from your VAT account to settle accounts with the tax authorities, ZUS or pay customs duties, you have the right to apply to the tax authorities for a release of funds.

You can submit an application online or at the appropriate tax office. The application does not have to be for the entire amount of the funds: you can decide on the amount you wish to be released. To apply is free of charge and a decision will be taken within 60 days.

In principle, the tax office can only refuse to release the funds if you are in arrears with VAT or “there is a reasonable fear that your VAT obligations will not be met”. It is also possible the decision will be to release less than the amount you requested. In both these cases, you have the right to appeal the decision.

You will be notified of a positive decision by the tax office and the bank, which will immediately transfer the amount specified in the decision to your main account. From then on, you will be able to use the money for any purpose.


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