Split Payment Mechanism in Poland in 2026

The split payment mechanism constitutes one of the key instruments in the Polish tax system designed to strengthen the collection of value-added tax (VAT). Introduced into the Polish legal framework on July 1, 2018, pursuant to the Act of December 15, 2017, amending the Act on Tax on Goods and Services and certain other acts, this mechanism has undergone a significant evolution from an entirely voluntary form to a mandatory requirement for specified categories of transactions.

The essence of the split payment mechanism lies in the division of payment made by the buyer of goods or services into two separate parts. The net amount is transferred directly to the seller’s settlement account, while the amount corresponding to the VAT is automatically directed to a specially designated VAT account. This solution aims to limit the possibility of tax fraud by ensuring that funds intended for tax payment remain under strict control of the tax authorities.

Legal Basis and Regulatory Framework

The legal foundation for the split payment mechanism in Poland is the Act of March 11, 2004, on Tax on Goods and Services, particularly the provisions contained in Chapter 1a of Section XI entitled Split Payment Mechanism. Articles 108a through 108e are of key importance, establishing the principles of operation of this mechanism, the conditions for its mandatory application, and the legal consequences associated with violation of obligations in this regard.

The mandatory split payment mechanism was introduced on November 1, 2019, and applies exclusively to relations between VAT taxpayers, i.e., in B2B (business-to-business) transactions. Its application is required when three conditions specified in Article 108a(1a) of the VAT Act are met cumulatively. First, the subject of the transaction must be goods or services listed in Annex 15 to the VAT Act, which contains a detailed list of items subject to mandatory split payment. Second, the gross value of the entire invoice must exceed PLN 15,000. Third, both the seller and the buyer must hold VAT taxpayer status.

Scope of Mandatory Split Payment

Annex 15 to the VAT Act covers a broad catalog of goods and services deemed by the legislator to be particularly susceptible to tax abuse. This list constitutes a closed catalog of items, the acquisition of which, upon meeting the remaining statutory conditions, obliges the application of the split payment mechanism.

Changes to the Split Payment Mechanism from 2026

The year 2026 brings significant modifications to the operation of the split payment mechanism, resulting from the implementation of the mandatory National e-Invoice System (KSeF). These changes primarily concern the rules for completing the transfer communication and identifying transactions linked to specific sales documents within the KSeF environment.

From February 1, 2026, the transfer communication used for payments under the split payment mechanism must contain additional elements. In addition to the existing data such as invoice number, VAT amount, gross amount, and supplier’s NIP (tax identification number), it is required to indicate the invoice number in connection with which the payment is being made. For structured invoices issued through KSeF, the communication must contain the number identifying that invoice in the KSeF system – this is a unique 35-character identifier assigned to each invoice by the system.

Significant changes also apply to collective payments, i.e., settling more than one invoice with a single transfer. For structured invoices, instead of indicating individual invoice numbers, a collective identifier generated by KSeF is used. For invoices issued outside KSeF, the existing rule of indicating the period for which payment is made still applies.

It should be emphasized that the split payment mechanism can be applied in Poland until February 29, 2028. Further extension of this deadline requires the consent of the European Commission and acceptance by the Council of the European Union. An expansion of the scope of Annex 15 to the VAT Act is also planned to include new items, including raw sunflower oil and services related to tanker transport.

VAT Account – Functioning and Fund Utilization Rules

The VAT account constitutes an integral element of the split payment mechanism. It is a special bank account that banks and cooperative savings and credit unions are obligated to maintain free of charge for every holder of a settlement account maintained in connection with business activity. The VAT account is established automatically, without the need for the entrepreneur to submit a separate application.

Funds accumulated in the VAT account do not constitute the entrepreneur’s property in the classical sense of the term, as they are subject to significant restrictions regarding their use. Pursuant to Article 62b(2) of the Banking Law Act, funds from the VAT account may be used exclusively for strictly defined purposes. Primarily, they serve to pay the amount corresponding to VAT for the acquisition of goods or services to the supplier’s VAT account. Additionally, they may be used to pay tax liabilities for VAT, income tax (PIT and CIT), excise tax, customs duties, and social insurance contributions.

In situations where the entrepreneur does not fully utilize the funds accumulated in the VAT account for purposes provided in the statute, they may apply to the head of the tax office for consent to transfer these funds to the settlement account. The tax authority has 60 days to consider the application and issue a decision. Consent will be granted provided that the taxpayer has no tax arrears and no proceedings are being conducted regarding a tax overpayment refund.

Benefits of Using the Split Payment Mechanism

The legislator has provided a range of incentives and benefits for taxpayers using the split payment mechanism, both in cases of mandatory and voluntary application. These benefits are both financial and procedural in nature, and their purpose is to motivate entrepreneurs to widely use this mechanism in business transactions.

Exclusion of Joint and Several Liability

One of the most significant benefits associated with using split payment is the exclusion of the buyer’s joint and several liability for the seller’s tax arrears. According to the provisions of the VAT Act, the buyer may, in certain situations, be jointly and severally liable with the seller for unpaid tax. Application of the split payment mechanism eliminates this risk, which is particularly important in transactions with new or less familiar contractors.

Protection Against VAT Sanctions

Using the split payment mechanism protects the taxpayer from the application of increased interest rates for delay at 150% of the basic rate, which currently stands at 8% per annum. This means that in case of delays in tax payment, an entrepreneur using split payment will avoid interest charges at the increased rate of 12%. Additionally, the taxpayer is protected from additional tax liability, the so-called VAT sanction, which may amount to 30%, 20%, or 15% of the understated tax liability depending on the nature of the violation.

Accelerated VAT Refund

Taxpayers who apply for a refund of the excess input tax over output tax to the VAT account can expect a significant reduction in the refund processing time. The standard VAT refund period is 60 days from the date of filing the settlement, while for refunds to the VAT account, this period is reduced to just 25 days. Importantly, the accelerated refund is available without the need to meet additional conditions that are required for the standard 25-day refund to the settlement account.

Formal and Documentation Obligations

Using the mandatory split payment mechanism involves a number of formal obligations, the non-fulfillment of which may result in serious financial and legal consequences. The seller’s key obligation is to include on the invoice a special annotation split payment mechanism (mechanizm podzielonej platnosci). This notation must appear on every invoice documenting a transaction subject to mandatory split payment, regardless of the payment method chosen by the buyer.

The buyer, in turn, is obligated to make payment using the transfer communication, which enables automatic division of the amount into the net portion directed to the settlement account and the portion corresponding to VAT transferred to the VAT account. The transfer communication contains elements specified by regulations, including the invoice number, the seller’s tax identification number, the amount corresponding to all or part of the VAT, and the amount corresponding to all or part of the gross value.

Consequences of Violations and Sanctions

Non-compliance with mandatory split payment regulations carries severe sanctions that may affect both the seller and the buyer. A seller who fails to include the required split payment mechanism annotation on the invoice exposes themselves to the establishment of an additional tax liability of 30% of the tax amount shown on the invoice. This sanction is imposed regardless of whether the buyer actually made the payment using split payment.

From the buyer’s perspective, making payment for an invoice subject to mandatory split payment without using this mechanism results in the loss of the right to include the expense in tax-deductible costs. This limitation applies to that portion of the cost that corresponds to the VAT amount resulting from the invoice. Additionally, the buyer exposes themselves to joint and several liability for the seller’s tax arrears and loses protection against VAT sanctions.

Practical Aspects of Implementing Split Payment in Business

Effective implementation of the split payment mechanism requires appropriate organizational and technical preparation. Entrepreneurs should first conduct a detailed analysis of the assortment of goods sold and services provided in terms of their presence in Annex 15 to the VAT Act. Identification of items subject to mandatory split payment allows for proper configuration of invoicing systems and ensures automatic inclusion of the required annotation on appropriate documents.

Equally important is the adaptation of processes related to settling liabilities. The accounting or finance department should have tools enabling verification of whether a given purchase invoice requires the application of the split payment mechanism. To this end, it is necessary to monitor the value of invoices from individual contractors and verify whether the subject of the transaction is included in Annex 15.

Summary and Recommendations

The split payment mechanism constitutes a permanent element of the Polish tax system, knowledge of which is essential for the proper functioning of every enterprise operating in sectors covered by the regulation. Proper application of split payment, both in mandatory and voluntary cases, requires a systematic approach encompassing transaction analysis, appropriate document marking, and proper payment management.

Entrepreneurs are advised to regularly monitor legislative changes concerning the scope of Annex 15 and threshold amounts, as well as to continuously update internal procedures. It is also worth considering voluntary use of the split payment mechanism in transactions not subject to the obligation, particularly in relations with new contractors, due to the significant benefits in the form of exclusion of joint and several liability and protection against tax sanctions.

In case of doubts regarding the application of the split payment mechanism or interpretation of regulations in relation to specific transactions, it is recommended to seek professional advisory services. Specialists will assist in the proper qualification of transactions, preparation of appropriate procedures, and representation of the entrepreneur’s interests in contacts with tax authorities.