Another amendment to the VAT Act introduces a new solution: an additional payment method aimed at tightening the tax system. Provisions regarding the split payment enter into
force on 1 July 2018.

Amendments have been introduced under the Act of 15 December 2017 on amendment of the VAT Act and certain other acts (Journal of Laws of 10 January 2018, item 62). The method applies solely to transactions executed to the benefit of other taxpayers. Application of this method shall be decided on by the parties to the transaction, which means that using this mechanism is voluntary. As explained by the Ministry of Finance, the voluntary split payment is aimed as an instrument for entrepreneurs to protect them against consequences of transactions with unreliable contractors. Additionally, using the mechanism shall constitute one of prerequisites to prove the buyer’s due diligence in verifying the contractor with whom they entered into a transaction.

We are pleased to present another edition of the “Purple Guide”, that is, a cycle of analyses, in which we discuss legal, accounting and human resources issues important for entrepreneurs. This time, the topic of our cycle comprises issues related with split payment mechanism. We invite you to read it.

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