Poland Extends Mandatory VAT Split Payment Until 2028

• The European Commission has agreed to extend the mandatory split payment mechanism in Poland until February 28, 2028.
• The EU Council must approve the decision.
• Poland submitted an application for changes to Annex No. 15 to the VAT Act, which contains a list of goods and services covered by the split payment mechanism.
• The changes are intended to adapt the list to the classification of the Combined Nomenclature (CN).
• Poland attached a report to the application, which shows that the split payment mechanism has brought significant results in the fight against tax fraud.
• The value of VAT fraud decreased from almost PLN 5.2 billion in 2018 to less than PLN 1.7 billion in 2022.
• The number of VAT fraud proceedings decreased from 3,507 in 2018 to 2,750 in 2022.
• The split payment mechanism means that the payment for goods or services made by the buyer by bank transfer does not go in full to the recipient’s account, but is divided into the net amount and VAT.
• The net amount goes to the seller’s account, and the VAT amount goes to their VAT account.
• The mandatory split payment mechanism has been in force since 2019 and applies to payments for purchased goods or services listed in Annex 15 to the Act, documented by an invoice in which the total amount due exceeds PLN 15,000.

Source: crowe.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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