The split payment mechanism changes the way a VAT invoice is settled, but it does not increase the amount paid by the purchaser. The bank automatically divides the transfer: the net amount is credited to the seller’s settlement account, while the tax is credited to the seller’s VAT account.

Split payment is mandatory when the gross value of the invoice exceeds PLN 15,000, at least one item is included in Annex 15 to the VAT Act, and the seller and the purchaser are VAT taxpayers. All these conditions must be met simultaneously. In other cases, the division of payment is generally voluntary.

Key information from the article

• The threshold for mandatory MPP is an amount exceeding PLN 15,000 gross on the invoice.
• An invoice for exactly PLN 15,000 is not subject to mandatory MPP solely because of its value.
• The obligation applies to goods and services listed in Annex 15 to the VAT Act.
• The purchaser makes one special transfer, and the bank separates the net amount and VAT.
• A consumer does not use MPP, but a natural person conducting business activity may be subject to this obligation.

What is split payment and what does the division of the transfer involve?

Split payment, i.e. the split payment mechanism, is a special method of settling invoices showing VAT. The purchaser makes one transfer, while the bank divides the transferred amount between two of the seller’s accounts.

The net value is credited to the counterparty’s ordinary settlement account. The amount corresponding to the tax is credited to the linked VAT account. The purchaser does not need to know the number of this account — they only indicate the seller’s business account.

The split payment method requires the use of a special transfer message available in electronic banking. The following must be entered:

• the gross amount of the amount being settled,
• all or part of the VAT amount,
• the number of the invoice being paid,
• the NIP number of the supplier or service provider.

For example, for an invoice amounting to PLN 12,300 gross, consisting of PLN 10,000 net and PLN 2,300 VAT, the bank will transfer PLN 10,000 to the seller’s settlement account and PLN 2,300 to the seller’s VAT account. The purchaser still pays a total of PLN 12,300.

Split payment mechanism – from what amount must it be applied?

The obligation arises when the amount exceeds PLN 15,000 gross. The threshold amount is checked on the basis of the total amount due shown on the entire invoice, and not only the value of the items subject to MPP.

The answer to the question “from what amount does the split payment mechanism apply?” is: from an invoice with a gross value higher than PLN 15,000, provided that the other statutory conditions are also met. An invoice issued for exactly PLN 15,000 gross does not exceed the limit and is therefore not subject to mandatory MPP solely because of its value.

This distinction is very important. An invoice for PLN 15,000.01 may already be subject to mandatory split payment, while a document for PLN 15,000 is not. Exceeding the limit alone is still not sufficient: the invoice must include at least one good or service from Annex 15 to the VAT Act, and both parties must act as VAT taxpayers.

When is the split payment mechanism mandatory?

Mandatory MPP applies only when three conditions are met simultaneously. The absence of even one of them means that the purchaser is not required to use this mechanism, although they may do so voluntarily.

The split payment mechanism is mandatory when the value of the invoice exceeds PLN 15,000 gross, it includes at least one item from Annex 15 to the VAT Act, and the seller and the purchaser are VAT taxpayers.

Annex 15 includes, among others, certain:

• fuels, coal, scrap and waste,
• steel products and metals,
• electronic devices, including certain smartphones, tablets and consoles,
• parts and accessories for vehicles,
• electrical machinery and equipment,
• construction works.

However, the obligation should not be assessed solely on the basis of the common name of the product or service. The classification specified in the Annex is decisive; therefore, in case of doubt, it is advisable to check the CN or PKWiU code assigned to the specific item.

The question of when the split payment mechanism is mandatory therefore requires checking not only the amount, but also the subject of the sale and the status of the parties to the transaction.

Does the entire mixed invoice have to be paid using MPP?

It is not always necessary to cover all items with the mechanism. The statutory obligation applies at least to the amounts due for goods and services listed in Annex 15.

Let us assume that the invoice amounts to PLN 24,600 gross. Office supplies cost PLN 22,140, while the goods covered by Annex 15 amount to PLN 2,460, including PLN 460 VAT. Since the total value of the invoice exceeds PLN 15,000, payment for the sensitive item should be made using MPP. The remaining part may be paid by an ordinary transfer or — for simplicity — the entire invoice may be covered by split payment.

A split payment may therefore cover only the part of the invoice corresponding to the item subject to mandatory MPP. Paying the entire document using this mechanism, however, reduces the risk of making an error when calculating the appropriate part of the tax.

Worth knowing

The annotation “split payment mechanism” on an invoice does not create an obligation if the statutory conditions have not been met. On the other hand, the absence of this annotation does not release the purchaser from applying MPP when the content of the document indicates that all the conditions are met.

How to make a split payment correctly?

You should select the MPP transfer option in electronic banking rather than a standard domestic transfer. The banking system itself will transfer the specified VAT amount to the recipient’s VAT account.

A split payment is made to the seller’s business settlement account using a dedicated transfer message. The tax should not be transferred manually to a separate account number, nor should the counterparty be asked for the number of their VAT account.

Before approving the payment instruction, it is advisable to compare the details with the invoice: the document number, the seller’s NIP number, the gross value and the VAT amount. MPP operates in Polish zloty. If the commercial liability is specified in a foreign currency, the part corresponding to VAT may be settled in Polish zloty through the MPP message, in accordance with the method of settlement adopted for the particular invoice.

Split payment can also be used to settle advance payments. If the invoice has not yet been issued, the word “advance payment” is entered in the field intended for its number. A bulk transfer is also possible, but it must cover all invoices from one supplier for a period of not less than one day and not longer than one month.

Can split payment be used below PLN 15,000?

Yes, MPP may also be used voluntarily for lower amounts due. The purchaser may decide to pay all or part of the amount shown on an invoice with VAT in this way.

Mandatory split payment does not apply to an invoice for an amount equal to or lower than PLN 15,000 gross, even if the document concerns goods from Annex 15. Voluntary payment using MPP may, however, reduce the purchaser’s risk of joint and several liability when purchasing certain sensitive goods.

The mechanism can also be used when the invoice exceeds the threshold but does not contain any item from the statutory list. An example would be the purchase of ordinary office equipment for PLN 20,000 gross. In such a case, choosing MPP remains voluntary.

Does the split payment mechanism apply to a natural person?

An ordinary consumer does not use MPP. The situation is different for a natural person conducting business activity, as they may act in a transaction as a VAT taxpayer.

The split payment mechanism does not apply to a natural person making a private purchase, even if the value of the transaction exceeds PLN 15,000. A consumer purchasing a telephone, construction materials or car parts for their own needs therefore does not have to use mandatory MPP.

An entrepreneur operating as a sole proprietor is, on the other hand, a natural person, but may be subject to the obligation as a VAT taxpayer. If they receive an invoice meeting all the requirements, they should make the payment from their business settlement account. A private savings and current account does not have an assigned VAT account and therefore does not allow a mandatory split payment to be sent or received.

What are the consequences of failing to use mandatory MPP?

An incorrect method of payment may have tax consequences for both the purchaser and the seller. The penalties primarily relate to the VAT attributable to the goods or services subject to the obligation.

For a purchaser who does not apply MPP, the tax authority may impose an additional tax liability amounting to 30% of the VAT attributable to the items covered by the mechanism. The penalty is not imposed if the supplier correctly accounts for the entire amount of tax resulting from the invoice. There may also be consequences under the Fiscal Penal Code and restrictions on the right to include the expense as a tax-deductible cost.

The seller, in turn, should include the wording “split payment mechanism” on the relevant invoice. The absence of the annotation can be corrected with a corrective invoice, and the purchaser may issue a correcting note. However, the safest approach is not to base the decision solely on the wording of the document — before making the payment, the purchaser should independently check the invoice value and its items.

Frequently asked questions about split payment

Does an invoice for exactly PLN 15,000 have to be paid using MPP?

No. The mandatory mechanism applies to invoices whose total amount due exceeds PLN 15,000 gross, i.e. amounts to at least PLN 15,000.01.

When can the split payment mechanism be used voluntarily?

Voluntary MPP can be used for an invoice showing a VAT amount, even if its value does not exceed PLN 15,000 or it does not include an item from Annex 15.

Does the absence of an MPP annotation on the invoice allow payment by ordinary transfer?

No, if the statutory conditions for mandatory MPP have been met. The purchaser should use the split payment message despite the seller’s error.

Can an invoice subject to MPP be paid by card?

No, mandatory MPP requires the use of a special transfer message. Payment by card does not allow the bank to separate the net value and VAT.

Do the funds in the VAT account belong to the entrepreneur?

Yes, they remain the property of the entrepreneur, but they may be used only within the limits specified by law, including, among other things, paying VAT from invoices, taxes, customs liabilities and ZUS contributions.