Poland gets EU go ahead on VAT split payments
- Feb 20, 2019 | Richard Asquith
Poland has received approval from the EU to impose mandatory VAT split payments from 1 July 2019. The approval is temporary, lasting until February 2022.
Poland has already introduced voluntary split payments last July, with incentives such as rapid VAT credit repayments for businesses adopting the anti-VAT fraud measure. To impose this on all businesses, and deviate from the EU VAT Directive (article 226 of Council Directive 2006/112/EC), Poland had to seek approval from the EU Competitiveness Council.
Poland’s measure requires B2B vendors in VAT fraud sensitive sectors to set-up special VAT Accounts with banks. Customers must then separately make (‘split’) payments of the VAT element of invoices into these controlled accounts. Vendors have limited access to this account – they may generally only be used to settle month-end VAT liabilities. The sectors affected are: steel, scrap, electronics, gold, non-ferrous metals, fuels, and plastics.
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Non-EU businesses selling in Poland will need to appoint a fiscal representative alongside completing VAT registration and returns.
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