The European Commission recently authorised Poland to introduce a mandatory split payment mechanism for certain business-to-business (B2B) supplies of goods and services, that are fraud-sensitive such as steel, scrap, electronics, gold fuels and plastics.
The Polish Ministry of Finance has announced that this system is now only planned to come into effect in January 2020.
Under this split payment mechanism, businesses will be required to open a separate “blocked VAT bank account”, into which their customers must pay the VAT amount applicable to the bought goods and services. The money in this VAT account can only be used to pay VAT to the tax authorities and to suppliers. The mechanism would only apply to those supplies which are paid for through electronic bank transfer.We are monitoring the progress of this initiative and shall report updates as they unfold.