The Act of 15 December 2017 Amending the Act on Goods and Services Tax and Some Other Acts (Journal of Laws of 2018, item 62), introduced the Split Payment Mechanism (SPM) into the Act of 11 March 2004 on Goods and Services Tax (Journal of Laws of 2004, No. 54, item 535 as amended, hereinafter the “VAT Act”). Further amendments expanded the scope of SPM application, and in some areas enforces its obligatory use.
SPM regulations require from each payer to check if the payment for a VAT invoice received from a supplier needs to be executed in the SPM. The use of this method will be mandatory in case of the payment for the goods or services, mentioned in the Annex to VAT Act, given that total amount payable of the invoice equals 15 000 zloty or more.
Should the payer use the SPM, he can make a single payment in the online banking system with the use of SPM money transfer while providing the following details: invoice number, gross amount, VAT amount and recipient’s NIP (Tax Identification Number).
They also can make a bulk payment for the invoices issued in a given period by one contractor (aggregated payment). That period cannot be shorter than one day nor longer than one month. In this case, while defining the SPM payment, instead of the invoice number payer has to provide the period in which the invoices were issued.
After receiving a wire transfer under the SPM scheme, banking systems will automatically split the payment for the purchased goods or services by debiting the payer’s two separate accounts:
- the dedicated VAT account – with the VAT amount (not more than up to outstanding balance), which is transferred to the settlement account,
- the settlement account – with the gross amount.
Such a split payment will be transferred to the counterparty’s:
- settlement account – in respect of the net amount specified by the payer,
- VAT account – in respect of the VAT amount specified by the payer (this amount goes through the settlement account).
Taxpayers are able to use the VAT account’s balance to pay e.g. VAT, CIT, PIT, excise duties, customs duties and ZUS contributions.
To transfer the funds from the VAT account to the settlement account, the taxpayer is required to submit relevant application to the Tax Office.
We would like to draw your attention also to the fact that for the taxpayers who supply goods or services mentioned in the Annex to the VAT Act are obliged to open a bank account in Polish Zloty. All the banks, including HSBC Continental Europe (Spółka Akcyjna) Oddział w Polsce, open one VAT account for the currently kept account or accounts, which will enable the use of the SPM.
If you would like to analyse the impact of legislation on your business, we suggest you contact your tax advisor.