Split payment from 01.11.2019

From November 1 2019 comes into force the obligation to apply the split payment mechanism for certain groups of goods and services (details below), which eliminates the obligation to apply reverse charge.

The mechanism for split payment is the division of payment for a transaction into two accounts - the net amount is transferred to the main bank account of the contractor, and the amount of tax on the VAT account associated with this account. The VAT account was created automatically by banks and does not require any additional actions from you. The split payment mechanism will be mandatory for a certain group of goods and services. Among other things, it is - metal products, garbage, electronics, fuel for automobiles, construction work, trading auto spare parts - a detailed list is in the attachement. Additionally: mandatory split payment applies to transactions between companies providing services or trading goods included in the attachement, and includes transactions over PLN 15,000 zlotys it will not be possible to recognize the expense as tax deductible costs when the payment for a transaction over PLN 15,000 PLN was carried out in cash or when it was carried out without the use of a split payment mechanism it will be obligatory to put a note "MECHANISM OF SPLIT PAYMENT" („MECHANIZM PODZIELONEJ PŁATNOŚCI”) on the invoice about the obligation to use split payment (it should be remembered that the total invoice amount is counted, not the amount for individual groups of goods / services from the attachment included in the invoice) the obligation to use split payment eliminates reverse charge in the case of domestic transactions, which means that all invoices with the date of sale after November 1, 2019 should be issued with VAT. From November 1, changes will be made to the law on joint liability. In practice, joint liability means that the tax authority may seek the payment of tax from a company that is jointly and severally liable (the buyer) in case the seller has not paid tax for this transaction. The changes mainly concern: expansion of the category of services and goods in respect of which there is joint liability payment using the split payment mechanism excludes joint liability joint liability may take place regardless of the value of purchases made in a given month If you have any doubts or additional questions that you could not find an answer in this message, please contact us.

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