Dear Sirs,

On 9 November 2017, the Sejm adopted the Bill on Amendments to the Goods and Services Tax Act and Other Acts which concerns split payment mechanism, and referred it to the Senate.
The Bill assumes (in line with the current status of the legislation work) that under the law, banks will open only one VAT account for an entrepreneur, regardless of the number of settlement accounts held in PLN, unless the entrepreneur wishes otherwise. The Act comes into force on 1 April 2018.

Owing to the above, mBank will open and maintain only one VAT account for the client, linked with all his/her settlement accounts maintained in PLN.  The VAT account will be maintained in PLN. Opening and maintaining by the bank of the VAT account will not require conclusion of a separate agreement.

The settlement mechanism in VAT accounts

The bill assumes that an entrepreneur who receives a VAT invoice with a VAT amount stated therein should apply the split payment mechanism when making a payment.
Owing to the above, mBank has been working on transfer forms with the VAT amount and the data required under the act to be specified in order to identify payments - in particular the number of a VAT payer and the number of a VAT invoice.  The scope of the data indicated in the act requires that each transfer made with the use of the split payment mechanism settle the VAT liability arising from a single invoice.

Debiting VAT accounts

The technical settlement of the transfer with the use of the split payment mechanism (debited in the settlement account of mBank’s client) will be carried out in line with the following sequence of booking:
1. debiting the VAT account with an amount not exceeding the VAT amount indicated in the instruction,
2. crediting the settlement account with the VAT amount,
3. debiting the settlement account with the gross amount of the transfer indicated in the instruction.
If there are no funds in the VAT account to settle the indicated VAT amount, the amount will be settled with the use of funds from the settlement amount.

Crediting VAT accounts

Crediting the VAT account under the incoming payment with the split payment mechanism will be carried out in line with the following sequence of booking:
1. crediting the settlement account with the gross amount of split payment,
2. debiting the settlement account with the VAT amount indicated in split payment,
3. crediting the VAT account with the VAT amount indicated in the split payment order.
The above bookings will be carried out automatically by the bank’s settlement system.  mBank’s clients will not be obliged to transfer by themselves the VAT amounts to the linked VAT accounts.

VAT Payment using funds deposited in the VAT account

Pursuant to the act, mBank’s clients will be able to settle liabilities towards tax offices using funds deposited in their VAT accounts. For this purpose, a dedicated VAT form indicating an amount to debit a settlement account and credit a tax office will be used. Settlements in the VAT account and the settlement account will be booked in the following order:
1. debiting the VAT account with an amount not exceeding the VAT amount indicated in the instruction,
2. crediting the settlement account with the VAT amount transferred from the VAT account,
3. debiting the settlement account with the amount of the ordered tax payment.

If there are no funds in the VAT account to settle the indicated VAT amount, the amount will be settled with the use of funds from the settlement amount.

In line with the requirements of the act, all VAT-related payments will be settled by means of the settlement account, without the possibility of direct crediting or debiting the VAT account.

More information will be provided in the next announcement.

mBank  S.A.