On 1 July 2018, mBank launched the split payment mechanism. The split payment mechanism applies exclusively to settling VAT invoice payments between legal entities (B2B). Under the mechanism, VAT payments are made only in PLN from accounts maintained in this currency. Tax payments are not subject to currency conversion. We have introduced necessary changes in the electronic banking systems, mBank CompanyNet and BRESOK, as well as in the following products:

Domestic transfer order
Full service of split payments in domestic transfers (B2B payments for VAT invoices). Transfer orders may be submitted electronically and in hard copy.  Settlements are available in the Elixir and Sorbnet modes and additionally, in the mBank CompanyNet system, in the Express Elixir and BlueCash modes. The time of order execution is the same as in the case of standard domestic transfers.
In new split transfers, the gross amount is always charged to the settlement or auxiliary account indicated in the instruction. Based on the order data and information on the linked VAT account, we transfer the VAT amount from the VAT account to the settlement account. If there are insufficient funds in the VAT account, we transfer the remaining VAT amount from the charged account.

Tax transfer order
For the purposes of VAT payment to the Tax Office, we automatically transfer the funds from the VAT account to the current or auxiliary account to be charged. The full VAT amount is paid from the current or auxiliary account. In the case of insufficient funds in the VAT account, the remaining amount is collected from the current or auxiliary account.

Direct debit
Similarly to domestic transfers, we execute direct debits in the electronic banking systems only for B2B payments. We accept and execute split direct debits under the same rules as traditional direct debits. The only change is that the payer needs to consent to split direct debit. If the consent is missing, the transaction may be cancelled by the payer. We have additionally introduced:
1. a new code for cancelling a direct debit (04 - when the payer’s account does not support split direct debit),
2. changes in the REPPZ02 and REPPZ03 report forms - more characters in the 'reference' field.

Loans and multi-product lines
Overdraft will still be governed by the same rules. Other loans (investment, revolving, renewable) may be disbursed under the domestic split payment mechanism as payment for VAT invoices. To execute split payments, an amending annex to a loan agreement has to be signed.

Trade finance products based on purchase of receivables and payment of obligations
We will make it possible to make financing payments via regular transfers as well as split transfers. We accept any form of incoming transfers. Regardless of the transfer form, the full transfer amount will be registered as repayment.

Assignment of receivables to secure loans and other products with credit risk
Regardless of the transfer form, the transfer amount will be registered as loan repayment security or included in the assignment account balance consolidation. In newly concluded agreements on assignment of receivables under the split payment mechanism, it is now possible to transfer returns in the VAT amount from the assignment account to the client’s VAT account.

For more information about the split payment mechanism go to the official website of mBank.