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Effective November 2019 Poland introduces Split Payment Mechanisms


The Polish tax authorities announced that effective from Nov. 1, 2019, Poland will introduce what is known as a Split Payments Mechanism (SPM). Nonresident businesses that are registered for value added tax (VAT) will need to have a bank account in Poland, and will require an additional VAT bank account dedicated to receiving and making VAT payments.

How does it work

Under an SPM arrangement, the seller of certain goods must include some additional wording in its sales invoices, indicating that the sale is being made under this regime. When the purchaser comes to settle that invoice, it must select a particular banking document, which notifies the bank that the payment they are making should be split between the net value and the VAT amount. The bank then credits the net value to the seller’s regular account and the VAT amount, which must be paid in Polish Złoty, to the seller’s dedicated VAT account.

It should be noted that funds deposited into the new dedicated VAT bank account are subject to limitations on their use. Historically, businesses have been able to use VAT collected as part of their broader working capital. This will no longer be the case; money in the VAT account will only be able to be used to settle tax debts with the authorities. With a standard VAT rate of 23% in Poland, this could represent a significant funding challenge for some businesses.

Scope of the changes

The new rules will apply to business-to-business transactions covering a limited range of goods and services. There are more than 150 types of goods and services included in Appendix 15 to the draft act, which are subject to the obligatory split payment mechanism. They can be broken into the following categories:

  • electronic equipment
  • steel products and scrap
  • base metals, precious metals and jewellery
  • waste and recyclables
  • fuels and oils
  • chemical products and plastics
  • coal
  • automobile and motorcycle parts
  • services of transferring greenhouse emissions allowances
  • construction services

Additionally, the rules only apply to sales exceeding PLN 15,000 (roughly $4,000 U.S. dollars).However, this value relates to the entirety of the supply, so if there are multiple invoices or payments involved, they should be aggregated to determine whether the sale exceeds the threshold.

Actions you can take now

There are five main action points that businesses should consider:

  1. Assess whether the business is impacted by these changes by reference to the types of goods and services being supplied in Poland, and their value.
  2. Where no local bank account is held and is now required, ensure an account is opened, and a second dedicated VAT account is created before November 1, 2019. A discussion with the business’s current Polish bankers would be a good starting point.
  3. Ensure that financial and billing systems are updated to enable the inclusion of the newly-required language that should appear on sales invoices. Note that tax authorities are empowered to impose a penalty equal to 30% of the tax due in cases where this wording is not applied correctly.
  4. Consider how invoice settlement processes will be affected, as different forms will be required to pay relevant vendor invoices. Accounts payable staff may also require additional training to identify invoices with the new wording so they can direct them to the new settlement process.
  5. Consider how the new, dedicated VAT bank account will impact your tax audit process.

How can RSM help

RSM’s dedicated VAT practice can assist businesses with reviewing and implementing changes to ensure compliance with SPM ahead of the Nov. 1, 2019, deadline. With resources in the United States, Poland, and around the world, RSM can help with:

  • Impact assessments –Provide a comprehensive report covering the effects of the changes on the business, and the specific actions that need to be taken in order to achieve compliance.
  • Contract review –Assess contracts fulfilled over a long period (or those subject to multiple invoices and payments) to establish whether they fall within the scope of these changes and how they should be managed in the new environment
  • Systems configuration – Assist in reviewing and identifying changes needed to invoices, accounting and reconciliation systems to accommodate the VAT SPM rules.
  • Training – Provide training to businesses to ensure they have a full understanding of the new requirements ahead of the November deadline.


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