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, czyli dzielona płatność, obejmie obligatoryjnie w pierwszym rzędzie duże firmy, tj. te zatrudniające co najmniej 250 osób i z obrotem co najmniej 50 mln euro rocznie (lub zatrudniające co najmniej 250 osób i mających sumę aktywów bilansu na poziomie co najmniej 43 mln Euro). Mniejsze firmy również mogą już od 1 lipca dołączyć do tego systemu, jednak obligatoryjnie będą włączone od początku przyszłego roku.

The Fiscal Office is encouraging micro, small and medium-sized companies to move faster to the split payment system, committing to give back overpaid VAT more efficiently - not up to 60 days, as it was until now, but only up to 25. At the same time, however, it is forcing changes from above, as if one company uses the split payment mechanism, the VAT from this company sent to the other company will be blocked in a special account. Such a rule will lead to the blocking of funds and force VAT to be financed from the net income of many companies, point out PMR Restructuring SA specialists, who analyse the business risks of companies, including liquidity problems.

Accountants from all over Poland confirm that banks are currently sending information to their client companies about changes to their accounts that will enable split payment processing. There will be a special sub-account attached to the main accounts into which VAT will flow. A taxpayer will only be able to transfer funds from this mechanism 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 apply to the tax office for permission to make a transfer to the current bank account which he uses to conduct his business activity. However, some entrepreneurs expect that such a request may involve an audit by the IRS.

The material appeared on BiznesTuba.co.uk:

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