Split Payment

In Polish Localization, it possible to mark transactions for which the VAT paid is subject to the split payment mechanism (SP), and distinguish if split payment is applied due to the obligation resulting from the provisions of the VAT act or it is applied at the user’s discretion.

From July 1, 2021, the SP marking for these transactions is not used and is considered an error since the file structure was changed from January 1, 2022. Currently, exceeding the invoice amount of PLN 15,000 gross and classifying at least one item from the invoice as the goods or services listed in Annex No. 15 results in the obligation to use the split payment mechanism. The SP attribute should not be listed in the file.

To properly mark entries to be settled with split payment, the Split Payment field has been added on documents and entries. This field determines the type of a bank transfer generated in a set format. By selecting the Split Payment field in the document or by selecting the action in the customer/vendor entry, you decide that the split payment mechanism is to be applied. When entering the documents, the system checks if the transaction meets the statutory requirements for applying mandatory split payment. When you select the Release or Statistics actions, the Split Payment parameter is added, and when you post the transaction, you have to confirm that whether it can be posted without marking this parameter. For example, the following message is generated: ‘The document meets the requirements for Mandatory Split Payment, but the Split Payment is not enabled. Do you want to continue?’

The following articles cover a variety of topics related to split payment.

To	See
Verify and automatically change the split payment setup	Split Payment Setup in Sales and Purchase Documents
Learn how to enter and post sales documents with split payment	Maintaining Split Payment within the Sales Process
Learn how to enter and post purchase documents with split payment and register purchase documents by using journals and change the split payment selection for payable amounts	Maintaining Split Payment within the Purchase Process

The split payment mechanism (SP) was introduced as a voluntary method for settlement from July 1, 2018. The change of the VAT act ( taxation of goods and services) that introduces the split payment mechanism required modifications in Microsoft Dynamics 365 Business Central by adding a new functionality within Polish Localization and the electronic banking functionality that is available within the Electronic Banking solution. For detailed information, please see Integration with the Polish Localization Application.

Split Payment Rules and Requirements

This documentation describes the Polish Localization functionality that enables you to maintain the sales and purchase processes with regard to the requirements for the split payment mechanism.

Split payment is applicable only to business entities that settle B2B transactions.
If an invoice contains the “split payment” annotation, split payment is mandatory whereas in other cases, the customer who pays for the invoice can decide whether split payment is to be applied.
Split payment is applied only if the gross invoice amount exceeds 15 000,00 PLN and the invoice contains at least one item listed in Annex no. 15 to the VAT Act.
Split payment enables the customer to make a payment by indicating the VAT amount that is to be transferred to the vendor’s separate VAT account and the remaining amount to the current bank account.
The bank will send the gross amount from the settlement account while reposting the VAT amount from the VAT account to the settlement account at the same time.
The bank that receives the transfer under the the split payment scheme will post the gross amount on the vendor’s account indicated in the transfer. Next, the VAT amount will be transferred to the vendor’s dedicated VAT account.
Split payment replaced the reverse charge mechanism that was used earlier for domestic transactions in the case of which the customer is a taxpayer.

The following requirements are effective since July 1, 2018 according to the VAT Act:

The obligation for banks to maintain a dedicated VAT account for their customers that is linked to bank accounts in PLN - the split payment procedure applies only to VAT payments in PLN.
The new type of settlement for outgoing transfers and incoming payments by using the split payment procedure.
The account owner is deemed to be the owner of the funds deposited on the VAT accounts. However, he is entitled to settle only those liabilities that arise out from VAT regulations.
The payments collected on the VAT account may only come from:
- a received payment order that was settled by using the split payment formula,
- the payment order related to the issuing of a credit memo that was settled by using the split payment formula,
- VAT settlements with the tax office (a refund of excess VAT by the tax office that depends on individual decisions concerning taxpayer’s VAT resources made by the head of the tax office),
- the transfer of funds from another VAT account belonging to the holder of the VAT account maintained by the same bank,
the rule that transfer description and bank statement description have been defined as required and contain the required elements:

*/VAT/10n,2n / IDC/14x / INV/35x / TXT/33x*

where

n - natural number, x - any character, VAT - VAT Amount, IDC - Vendor VAT Registration No., INV - invoice no., TXT - any text containing max. 33 characters

**Example:**

/VAT/kwota VAT/IDC/NIP DOSTAWCY/INV/NUMER FAKTURY/TXT/ DOWOLNY TEKST

Table of Contents

Split Payment

Split Payment Rules and Requirements

See Also