Poland Gets Green Light on Split Payments for VAT

The Competitiveness Council of the European Union Feb. 18 permitted Poland to introduce a mandatory split payment mechanism for supplies of goods and services that are most susceptible to value-added tax (VAT) fraud.

A split payment mechanism, which Poland implemented on a voluntary basis last July, helps secure transactions against VAT fraud by splitting payments between companies into their net and VAT parts. The net part is paid directly to the supplier of goods or services while VAT is also paid to the supplier but to a separate blocked account used only to pay VAT.

The decision grants Poland the ...