Split Payment will continue
The European Commission has agreed to extend the application of the split payment mechanism (Split Payment) in Poland. This means that it will not disappear at the beginning of March.
Why the cut-off date of 1 March 2022? Because until that date, the previous Council Implementing Decision (EU) 2019/310, which allows the mandatory application of the split payment mechanism (MPP) to goods and services listed in the annex to that decision (Annex 15 to the VAT Act), is in force.
However, in July 2021, a derogation request was submitted to the EC to authorise the mandatory MPP for another 3 years, i.e. from 1 March 2022 to 28 February 2025. The EC agreed to extend the IRP for another 3 years, with effect from 1 March 2022.
– The draft derogation decision was presented by the EC on 22 February 2022, and therefore, as envisaged by the MF, the decision will be adopted by the EU Council in March 2022. However, the content of the draft Council implementing decision includes a regulation confirming its earlier application (i.e. from 1 March 2022, as requested by Poland). As a consequence, as of 1 March 2022, the national provisions on obligatory IRP will not change and there will still be an obligation to apply this mechanism under the existing rules, with regard to goods and services listed in Appendix 15 to the VAT Act – indicates Andrzej Kapczuk, tax advisor, partner at Thedy & Partners.