Poland & Romania have announced updates regarding VAT Payment splits
The Polish Government has announced a delay for the introduction of mandatory split VAT payments from 1st July 2019 until the beginning of 2020.
This will apply to a range of B2B transactions such as:
- computer chips,
- mobile phones,
- games consoles,
- high-value metals,
- construction works,
- domestic and automotive fuel.
The system has been available voluntarily since July 2018, with VAT liability discounts as an incentive. This anti-VAT fraud measure requires B2B buyers to pay the VAT portion of a sale into the special bank account of their suppliers. These special accounts will only be used for the settlement of VAT returns. Only Polish resident banks will have these VAT Accounts.
Romania has removed the mandatory requirement for VAT split Payments following an order that was issued last November by the European Commission.
According to the EC, the split VAT payment system has been causing a major administrative burden for honest companies doing business in the country. The measure required customers to pay the VAT element of supplier’s invoices into a special and restricted account of the supplier.
This anti-fraud measure will remain voluntary. There is an incentive of a 5% discount off corporate income taxes. It is estimated over 18,000 businesses are currently using the mandatory regime.
If you are unsure of how these changes and updates may impact you, please feel free to contact Taxback International on email@example.com