Polish VAT split payments 2018
- EU VAT
- 21 July 2017 | Richard Asquith
Poland is proposing to introduce an anti-VAT fraud split payment regime from 1 January 2018.
The scheme involves customers paying the VAT element of any B2B supply directly into a supplier secure VAT bank account. This account is then directly accessible by the tax authorities for settlement of the VAT liability and reconciliation to the regular Polish VAT return.
Other features include:
- The purchaser makes the decision to split the payments to the supplier on an invoice-by-invoice basis
- All VAT-registered suppliers must offer a secure, "VAT bank account" for this facility, which will be established by the end of 2017 by any Polish bank, and provided without fees.
- The VAT bank accounts will also be used for credit notes or refunds from the tax authorities
- Tax payers may use the account balance for paying VAT split payments to their own suppliers
- Suppliers will have to reconcile split payments received against their VAT return declaration of VAT due
- VAT credits will be refunded within 25 days, compared to the existing 60 days
- VAT fraud-sensitive sectors (e.g. fuel, alcohol, tobacco and electronics) may be mandatory
- Companies participating in the scheme will not be held jointly and severally liable to VAT fraud in their supply chain
- The will also be a discount for tax payers settling their Polish VAT liabilities early via their VAT bank account
- Domestic reverse charge schemes in certain sectors may be withdrawn
Italy already uses the split payment system for public service B2B transactions.