Just before Christmas the Finance Ministry published official guidance on regulations governing the split payment mechanism and the white list of taxable persons.

WHITE LIST

  • Among other things, FM confirmed that the following rules apply:
  • A foreign business will not be required to open a Polish bank account to operate as its white-listed account for sales to Polish customers as long as the business is not acting as a taxable person for Polish VAT purposes. Thus, if a foreign company is not using a Polish tax ID (NIP) for the purposes of its transaction, the white list regulations will not apply to that transaction at all.
  • A foreign business registered as a non-exempt taxable person for Polish VAT purposes and engaging in taxable transactions in Poland is treated as a Polish taxable person whose current account should be registered on the white list.
  • Where a taxable person pays an invoice supporting an intra-Community acquisition of goods, an import of goods, an import of services or a supply of goods for which the customer is the person liable to tax (which are transactions with foreign parties), the person is not required to check if his payment is made into a white-listed account, whether or not the supplier is VAT-registered in Poland for other transactions.
  • Payments into a virtual account will be treated as payments into the current account with which the virtual account is associated. So if a person has a current account on the white list, a payment made into a virtual account associated with that current account will discharge the payer’s duty to pay into a white-listed account.
  • Accounts held in foreign banks which do not operate in Poland through branches will not be registered or put on the white list.
  • Neither will the white list feature the so-called combination accounts (rachunki oszczędnościowo-rozliczeniowe).

SPLIT PAYMENT

FM explains that the following rules apply to the split payment mechanism:

  • There is no duty to use the split payment mechanism for services which are paid for in stages and each invoice is below PLN 15K (such as, for example, 3 x PLN 10K for construction services). However, use of a series of invoices instead of one single invoice should be the adopted course of dealing and cannot have the purpose of evading the split payment regulations.
  • There will be no penalty for putting the “split payment mechanism” label on an invoice which does not have to be split paid. If the customer receives such an invoice, he does not need to apply the mechanism when paying it.
  • If an invoice issuer forgets to put the required split payment label on it, he should raise a correcting invoice. The faulty invoice may also be revised by the customer issuing a correcting note.
  • Where a supply subject to the split payment mechanism is denominated in a foreign currency, two payments must be made:
  • the VAT must be paid by bank transfer into the VAT account in Polish zlotys in accordance with the VAT amount stated in PLN on the invoice;
  • the net amount should be paid in the foreign currency via another bank transfer or can be settled otherwise.
  • The FM’s guidance document also offers information on payments into accounts operated by enforcement officers (bailiffs) as well as information on payments to third parties, factoring payments, multi-party payments, currency payments, summary payments and advance payments.

If this issue pertains to your business and you are interested in our assistance, please contact us.

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