Split payment from 1 July

Split payment comes into force for all companies in Poland, obligatory for large ones from 1 July this year and for all others from the beginning of next year. The Ministry of Finance is encouraging small and medium-sized companies to also join the system from July. Accountants across Poland confirm that many companies are already preparing for this option. However, PMR Restructuring SA specialists warn that some entrepreneurs may experience temporary liquidity problems.

Split payment, or split payment, will obligatorily cover large companies in the first instance, i.e. those employing at least 250 people and with a turnover of at least EUR 50 million per year (or employing at least 250 people and having total balance sheet assets of at least EUR 43 million). Smaller companies can also join this system from 1 July, but they will be included obligatorily from the beginning of next year.

The tax office encourages micro, small and medium-sized companies to move faster to the split payment system, committing to more efficient return of overpaid VAT – not within 60 days, as it was so far, but only within 25 days. At the same time, however, it forces changes from above, because if one of the companies use from the split payment mechanism, VAT from this company sent to the other company will be blocked in a special account. Such a rule will lead to blocking of funds and will force VAT financing from the net revenues of many companies – indicate PMR Restrukturyzacje SA specialists who analyse business threats to enterprises, including liquidity problems.

Accountants from all over Poland confirm that banks send this information moment to companies being their clients, information about changes in the management of accounts, which will enable handling of payments in the split payment system. A special sub-account will be added to the main accounts, to which VAT will be paid. The taxpayer will be able to transfer funds from this mechanism only to the VAT account of another entrepreneur or to pay VAT liabilities to the tax office. In order to make other transactions from this sub-account, the entrepreneur will have to ask the tax office for permission to make a transfer to the current bank account used for conducting business activity. However, some entrepreneurs expect that such a request may be associated with an inspection by the Tax Office.

The material appeared on BiznesTuba.co.uk:

20 June 2018:
" Split payment from 1 July - will there be liquidity problems?

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