Splitting invoices in obligatory split payment
There is no obstacle for the seller to perform invoicing separately for the sale of goods listed in Appendix 15 to the VAT Act and the sale of goods outside that Appendix as part of one order – such a standpoint was taken by the Head of the National Revenue Information Service in a private tax ruling issued on December 19, 2019, case no. 0111-KDIB3-2.4012.646.201 9.1.AZ.
A motion for a private ruling set out the facts where the applicant was an active VAT tax payer engaged in the sale of power hydraulics components as well as specialised automotive equipment. According to the mechanism in force at the applicant’s company, the release of goods from a warehouse is documented each time with a VAT invoice.
Before the amendments to the provisions of the VAT Act adopted on November 1, 2019, the applicant documented domestic sales of goods taxed 23% VAT and sales of goods with reverse charge, where the buyer was obliged to settle the VAT, on separate VAT invoices. Since November 1, 2019 the split-payment mechanism has been in force for the goods listed in Appendix 15 to the VAT Act, provided that the value of the invoice documenting the sale of these goods will be equal to or exceed the amount of PLN 15,000 incl. tax. To the goods included in the Appendix 15, the 23% rate of VAT applies.
After the amendment coming into force, the applicant intends to continue issuing VAT invoices in a manner consisting in documenting the sale of goods from Appendix 15 on one invoice and the sale of other goods on a separate invoice, regardless of whether the invoices were issued to the customer on the same day. With regard to the above, the applicant asked a question whether it is appropriate to invoice the sale of goods included in Appendix 15 to the VAT Act and the remaining ones separately .
The Head of the National Revenue Information Service agreed with the applicant’s position, stating that the manner of issuing VAT invoices will be valid in the current legal situation.
The authority, referring to the regulations of the VAT Act, indicated that an invoice stating the total amount of receivables exceeding PLN 15,000 incl. VAT, or its equivalent, consisting of delivery of goods to the taxpayer specified in Appendix 15 to the VAT Act should include the wording ‘split payment mechanism’. Including such a note on an invoice requires that taxpayers apply the split payment mechanism. The Head of the National Revenue Information Service stated that in the light of the VAT Act, there are no obstacles for the seller to make, as part of one order, separate invoicing for the sale of goods included in Appendix 15 and the sale of other goods. The taxpayer may therefore issue a separate invoice for the delivery of goods covered by Appendix 15 and a separate invoice for the sale of goods outside that Appendix.
The Head of the National Revenue Information Service (KIS), referring to the situation presented in the motion for the private tax ruling, emphasized that for payments of receivables with application of the split-payment mechanism, the gross value resulting from the VAT invoice covering the goods listed in Appendix 15 is relevant, rather than the total value of the order containing goods from the Appendix and other goods.
If the Applicant performs the order concerning the goods in Appendix 15 exceeding the amount of PLN 15,000 on two consecutive days, and therefore two invoices are issued, a remark ‘split-payment mechanism’ should only be placed on the invoice whose amount exceeds the statutory threshold. It is not necessary to place such a note on either invoice if neither the gross amount resulting from one invoice, or the total amount due from the other invoice exceeds the threshold of PLN 15,000.
Magdalena Walczyńska, Tax Consultant, ATA Tax Sp. z o.o.
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