- The split payment mechanism (MPP) in VAT is a system where the payment amount is divided into two streams: the net amount goes to the company’s account, and the VAT amount goes to a separate sub-account.
- MPP is mandatory for VAT taxpayers who deal with “sensitive goods” listed in Annex 15 of the VAT Act.
- Sensitive goods include: coal, steel products, silver, gold, copper, aluminum, electronics, waste and secondary raw materials, plastic plates, sheets, films, fuels, engine parts, hard drives, integrated circuits, and construction work or work related to electrical, heating, or gas installations.
- MPP is mandatory for transactions between businesses that are equal to or greater than 15,000 PLN gross.
- Some businesses choose to use MPP voluntarily to manage tax risk and build trust with their partners.
- Using MPP can restrict the use of funds in the separate VAT account.
Source: ksiegowosc.infor.pl
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.
