Annex 15 to the VAT Act is a list of 150 items of sensitive goods and services for which the split payment mechanism becomes mandatory. The MPP obligation under Annex 15 arises when the gross value of the entire invoice exceeds PLN 15,000 and both the seller and the buyer are VAT taxpayers. The list was created according to PKWiU symbols and divided into three parts – goods, construction services, and the sale of vehicle parts. Whether a product is covered by the mechanism is determined by the item number and its description, not by its trade name.
Key information from the article
Annex 15 to the VAT Act contains 150 items – items 1–97 are goods, items 98–144 are construction services, and items 145–150 concern the sale of parts for vehicles and motorcycles.
Mandatory MPP applies when three conditions occur simultaneously – the gross value of the invoice exceeds PLN 15,000, one of the items comes from Annex 15, and both parties are VAT taxpayers.
The designation “ex” next to the PKWiU symbol narrows the item exclusively to the products listed in its description – item 9 covers plastic plates, sheets and films, but only stretch film.
A seller who does not include the statement “split payment mechanism” on the invoice and a buyer who does not make the payment using MPP are subject to an additional tax liability of 30% of the VAT amount attributable to the sensitive items.
A person conducting a sole proprietorship is instead subject to fiscal criminal liability – the fine amounts to as much as 180 daily rates for failure to include the statement and 720 daily rates for failure to make the payment using MPP.
When does MPP under Annex 15 become mandatory?
Mandatory split payment arises only when three conditions occur simultaneously, and the absence of any one of them removes the obligation from the transaction:
the total amount due under the invoice, i.e. its gross value, exceeds PLN 15,000,
at least one item on the invoice concerns a good or service listed in Annex 15,
the seller and the buyer are VAT taxpayers, meaning that this is a B2B transaction.
The PLN 15,000 threshold refers to the gross value of the entire invoice, not just the sensitive item – an invoice for PLN 20,000 gross containing a sensitive good worth PLN 5,000 falls under the obligation. Payment using the split payment mechanism covers the amount attributable to sensitive goods and services, although in practice it is simpler to transfer the entire invoice using MPP.
Invoices for PLN 15,000 gross or less are not subject to the obligation, which does not mean there is no risk. In the case of goods listed in Annex 15, the buyer is jointly and severally liable for the supplier’s tax arrears from the very first zloty, while voluntary payment using MPP excludes this liability. The mandatory split payment mechanism has been in force since 1 November 2019 and replaced the reverse charge based on Annexes 11 and 14.
Split payment mechanism – what goods are listed in Annex 15?
Annex 15 contains 150 items in three blocks – goods occupy items 1 to 97, construction services 98 to 144, and the sale of vehicle parts 145 to 150. The classification is based on PKWiU symbols, which is why flat-rolled products, base metals, secondary raw materials, diesel fuels or greenhouse gas emission allowances were included in the list under specific item numbers. It covers industries in which tax fraud and VAT carousel schemes occurred.
| Scope of items | Group of goods or services | Examples from the annex |
|---|---|---|
| 1–6 | Coal, solid fuels and rapeseed oil | hard coal and lignite, coke, briquettes |
| 7–9 | Consumables and films | toners and ink cartridges, stretch film |
| 10–39 | Steel products and ferroalloys | flat-rolled products, bars, sections, pipes |
| 40–58, 78 | Metals, steel structures and jewellery parts | silver, gold, platinum, aluminium, copper, parts of jewellery products |
| 59–66 | Electronics | processors, computers, HDD and SSD drives, telephones, televisions |
| 67–77 | Batteries and vehicle parts | batteries, spark plugs, starters, airbags |
| 79–91 | Waste and secondary raw materials | glass, paper and rubber waste, secondary raw materials |
| 92–97 | Fuels, data carriers and emission allowances | motor gasoline, diesel and heating oils, SSD drives |
| 98–150 | Construction services and sale of parts | construction works from PKWiU divisions 41–43, vehicle parts |
What does the “ex” symbol next to an item in Annex 15 mean?
The designation “ex” next to the PKWiU symbol narrows the item exclusively to the products listed in its description, rather than to the entire statistical classification. Item 9 covers plates, sheets, films, tapes and strips made of plastics, but only stretch film is covered by the mechanism. Item 63 refers to telephones for cellular and wireless networks, and the obligation applies only to mobile phones, including smartphones.
Four items in Annex 15 do not have a PKWiU symbol. Items 92 and 93 are defined by reference to the excise duty regulations and cover motor gasoline, diesel fuels, gases for powering engines, as well as heating and lubricating oils. Item 97 concerns greenhouse gas emission allowances, while item 43 concerns investment gold.
The same product can appear in several items at the same time. SSD drives appear in item 62 as permanent storage devices, and then in items 94, 95 and 96, i.e. in classifications relating to software and video recordings. Checking a single PKWiU symbol is not sufficient.
Investment gold also requires attention. Item 41 excludes it from the scope of unwrought or semi-manufactured gold on the basis of Article 121 of the VAT Act, but item 43 covers it regardless of the PKWiU symbol – despite the exclusion from one item, this good is subject to the obligation under another.
Split payment under Annex 15 – which construction services does it cover?
Split payment under Annex 15 covers construction services from items 98 to 144, i.e. PKWiU divisions 41–43 – general construction, installation and finishing works. The list includes the construction of residential and non-residential buildings, construction of roads, bridges, tunnels, transmission pipelines and power lines.
The subsequent groups consist of preparatory and installation works – demolition, earthworks, electrical, water and sewage, and gas installations – as well as finishing works, i.e. plastering, painting, flooring, roofing and scaffolding assembly.
The description of items 98 and 99 shows an aspect that is overlooked when estimating the obligation – the mechanism covers the construction of new structures, as well as the reconstruction and renovation of already existing buildings. Items 145 to 150 concern the wholesale and retail sale of vehicle parts, and in the case of motorcycles, only the sale of parts, not the vehicles themselves.
How to mark an invoice and pay for goods listed in Annex 15?
The seller is required to include the statement “split payment mechanism” on the invoice, while the buyer must pay using a transfer message containing four pieces of information. The statement is required whenever the invoice exceeds PLN 15,000 gross and contains an item from Annex 15. If it is missing, the seller issues a correcting invoice, while the buyer issues a debit note. The absence of the statement does not release the buyer from the obligation to pay using MPP, because the obligation results from the provision of law and not from the content of the document.
The transfer message is a form available in the electronic banking system of a business account. It includes the VAT amount, the gross sales amount, the invoice number and the supplier’s NIP. The buyer does not need to know the contractor’s VAT account number or make two transfers – they indicate the settlement account, and the separation of the net amount and tax takes place within the bank’s system. In the case of an advance payment, the word “advance payment” is entered in the invoice number field, while for a collective payment, the period in which the invoices were issued is entered, which may not be shorter than one day or longer than one month.
The bank or SKOK automatically and free of charge opens a VAT account linked to a settlement account maintained in connection with business activity. An entrepreneur using a personal account for business purposes does not have a VAT account and therefore cannot either receive or initiate a payment subject to mandatory MPP. A split payment transfer for a good listed in Annex 15 sent to a personal current account will be returned to the sender.
What penalties apply for omitting MPP for goods listed in Annex 15?
The head of the tax office determines an additional tax liability amounting to 30% of the VAT amount attributable to the items listed in Annex 15, rather than 30% of the value of the entire invoice. The seller-side penalty arises when the seller has not marked the invoice with the statement “split payment mechanism”, and it does not apply if the buyer, despite the absence of the statement, pays using MPP. A person conducting a sole proprietorship is instead liable under the Fiscal Penal Code and may be fined up to 180 daily rates.
A buyer who has paid such an invoice by an ordinary gross transfer is subject to an additional liability in the same amount, while the fine in the case of a sole proprietorship may reach 720 daily rates. The penalty is not imposed if the supplier has correctly accounted for the tax on the invoice.
The second consequence is the loss of the tax-deductible expense. A payment made without using the mandatory MPP does not constitute a tax-deductible cost to the extent attributable to sensitive goods and services, and in the month in which the payment is made, costs must be reduced or revenues increased.
When is MPP not applied despite an item from Annex 15?
Split payment does not apply when the invoice does not exceed PLN 15,000 gross, when the buyer is a consumer, when the settlement takes place through set-off, or when payment is made in cash or by card:
the invoice amounts to PLN 15,000 gross or less,
the settlement takes place through the set-off of claims under Article 498 of the Civil Code,
the transaction results from a public-private partnership agreement and the seller was a private entity,
the buyer is a consumer, because the mechanism covers only transactions between VAT taxpayers,
the invoice does not contain a tax amount because it was issued by a VAT-exempt taxpayer,
payment is made in cash, by card or in another form other than a transfer in PLN,
the document is a pro forma invoice, which is not an invoice within the meaning of the VAT Act.
MPP under Annex 15 – how to check whether a good is subject to split payment?
Verification takes place in four steps – first, the PKWiU symbol of the good or service is determined, then the appropriate block of items is located, next it is checked whether the item contains the designation “ex” narrowing its scope, and finally it is confirmed that the same product does not appear under another item. In the case of fuels, heating oils and emission allowances, the first step is omitted because the PKWiU classification does not describe these items.
Splitting a single supply into several invoices with a gross value below PLN 15,000 in order to avoid the MPP obligation is treated as tax avoidance. The tax authority may regard such documents as one transaction, in which case the obligation to pay using split payment returns for the sensitive items, together with the additional tax liability.
Foreign-currency invoices require separate attention. The PLN 15,000 threshold is applied after conversion into PLN according to the exchange rate adopted for the tax settlement of the relevant invoice, while split payment itself operates exclusively in PLN. Industry publications describe the settlement of such an invoice inconsistently, so in the case of items from Annex 15, it is more reasonable to agree with the contractor to invoice in PLN. Items for which there are classification doubts are resolved through an individual tax ruling.
Frequently asked questions
How many items does Annex 15 to the VAT Act contain?
The annex contains 150 items – goods from 1 to 97, construction services from 98 to 144, and the sale of parts from 145 to 150.
Do I have to pay using MPP if the invoice does not contain the statement?
Yes, if the invoice exceeds PLN 15,000 gross and contains an item from Annex 15. The statement is the seller’s obligation, and its absence does not remove the buyer’s obligation.
Does the PLN 15,000 threshold apply to the entire invoice or only to the goods listed in Annex 15?
The threshold refers to the gross value of the entire invoice, while the mandatory payment covers the amount attributable to the sensitive items.
What does the abbreviation “ex” next to the PKWiU symbol in Annex 15 mean?
It narrows the item exclusively to the products listed in its description, rather than to the entire PKWiU classification. Item 9 covers plastic products, but only stretch film is covered by it.
Are construction services always subject to MPP?
Only when the invoice exceeds PLN 15,000 gross and both parties are VAT taxpayers. Construction works from PKWiU divisions 41–43 alone do not create the obligation.
What penalty applies for paying by an ordinary transfer instead of MPP?
An additional tax liability of 30% of the tax amount attributable to the sensitive items, as well as the loss of the tax-deductible expense in that part. In the case of a sole proprietorship, the fine may reach 720 daily rates.