Split payment — Poland's divided VAT payment mechanism

Split payment VAT in Poland: when mandatory, how the VAT account works and penalties for non-compliance.

Split payment (podzielona płatność) is a VAT payment mechanism where the net amount goes to the supplier's regular account and the VAT portion goes directly to a dedicated VAT account. The goal is to seal the tax system and reduce VAT fraud.

When is split payment mandatory?

Mandatory MPP (mechanizm podzielonej płatności) applies to invoices with a gross value above PLN 15,000 for goods or services listed in Annex 15 of the VAT Act (e.g. steel, electronics, fuels, construction services). The invoice must include the annotation 'mechanizm podzielonej płatności'.

How does the VAT account work?

Every VAT-registered business automatically has a VAT account linked to its business account. Funds in the VAT account can only be used for: paying VAT to the tax office, paying VAT to suppliers via split payment, and release with tax-office consent.

Consequences of ignoring MPP

Failing to apply mandatory split payment risks: a 30% VAT sanction on the invoice tax amount, an additional tax liability, and joint and several liability for the counterparty's VAT arrears. The buyer who skips MPP also loses the right to deduct the expense.

Voluntary split payment — benefits

Using MPP voluntarily beyond the mandatory scope brings advantages: accelerated VAT refund (25 days instead of 60), protection against joint liability and additional tax liability, and improved credibility with counterparties and the tax authority.

Split payment is a key part of VAT compliance in Poland. Danexis ensures your business applies the mechanism correctly and stays free of sanctions.