The obligatory split payment mechanism1[1] (SPM) covers invoices whose gross value exceeds PLN 15,000 (or its equivalent) and transactions involving goods and services listed in Annex 15 to the Polish VAT Act, e.g., electronic goods, fuels, steel, construction services, etc. Such invoices should contain the phrase “split payment mechanism”.
Marking the invoice with the words “split payment mechanism”, in the previously indicated cases, is an obligatory element of the invoice. High sanctions for the lack of the “split payment mechanism” on the invoice, when split payment is mandatory, mean that part of taxpayers mark each invoice this way. It makes invoicing easier, as it frees the seller from the obligation to analyze each transaction. Tax authorities consider this practice to be incorrect but allow it.
From October 1, 2020, active VAT payers will send VAT-7 and VAT-7K returns in the form of a new JPK_VAT[2] file, which will include the declaration and records. The VAT register will contain a detailed scope of data, including marking the transaction subject to the obligation to use the split payment mechanism in the sales records with the symbol “MPP”.
The obligation to mark invoices with the “MPP”[3] symbol in JPK_VAT (SAF-T V7 or earlier called SAF-T VDEK) will apply only to taxpayers making transactions with the obligatory use of the split payment mechanism, i.e., invoices issued for a gross amount higher than PLN 15,000, documenting the delivery of goods or the provision of services listed in Annex 15 to the VAT Act. The MPP marking of all invoices with such annotations will not be correct.
Besides, from October 1, 2020, some deliveries of goods and the provision of services will be presented by the symbols GTU_01-GTU_13 – you can read more on that matter at our article available here (GTU codes for the new SAF-T), hence, in the case where a transaction is subject to the obligation to use the split payment mechanism, then the besides marking the GTU code, taxpayers can be obliged to mark such transaction with “MPP” indicator as well.
According to the new regulations, the lack of mandatory marking of transactions subject to such obligation in the new JPK_V7 file is subject to penalties in amounts of PLN 500 (approx. EUR 120) for each error indicated in the SAF-T reporting file. Taxpayers may, however, avoid these penalties by filing an amendment of the reporting within 14 days following the date of indicating the error by the Tax Office.
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[1] Split Payment Mechanism (SPM) in Poland called Mechanizm Podzielonej Płatności (MPP).
[2] JPK_V7 an abbreviation of the new type of reporting obligatory in Poland as of October 1st, 2020. The official name of the report is JPK_V7 (SAF-T_V7), but you can also find the working name of the file, which is JPK_VAT (SAF-T VAT) or JPK_VDEK (SAF-T VDEK).
[3] MPP – an obligatory abbreviation that must be used in a SAF-T V7 reports in case of reporting transactions under split payment mechanism.