Poland Requiring Tax Payments on Certain Goods to Be Settled Through Split Payment Mechanism

Poland will require importers and other buyers to settle tax payments through a split payment mechanism beginning Nov. 1, and could impose “severe sanctions” on violators, according to an October KPMG alert. The payment mechanism will apply to buyers of electronics, fuels, steel, recyclable materials, car parts and construction services, the report said, with some exemptions available. If a taxpayer makes a payment “without the application of a split payment despite such an obligation,” Poland may impose an “additional tax liability in the amount of 30 percent of the tax attributable to the purchased goods or services,” KPMG said. Under the split payment mechanism, which was made mandatory for certain goods in September, the net amount of a sale is transferred to a regular bank account while the amount of value-added tax is transferred to a designated VAT account, KPMG said.