MPP code in JPK_V7 - everything you need to know
From October 1, 2020, the new JPK_V7 structure applies to taxpayers. There have also been changes in the sale of split payment - now, in the case of transactions with the obligation to use the split payment mechanism, you need to remember about the additional designation of SPM in JPK_V7. The following article also provides information on situations in which the use of SPM for taxpayers is mandatory.
When should MPP be used?
The split payment mechanism is used by active VAT payers for certain domestic transactions. Pursuant to Art. 108a paragraph. 2 of the VAT Act, payment for the purchased goods or service with the use of SPM consists in dividing the invoice value into a net amount and VAT, with the net sales value being paid to the supplier's settlement account, and the VAT amount from the invoice is transferred to his VAT account.
Split payment transactions are carried out only through settlement accounts in the bank or registered accounts in SKOK opened in connection with the conducted business activity (company accounts). It will not be possible to make a payment using the SPM when the invoice includes the contractor's personal account number.
The entrepreneur wants to make a payment for the invoice received using the SPM. He made sure that the contractor's account number stated on the invoice was not his company account. In this case, will the split payment made by the entrepreneur be correct?
The use of a personal account by a taxpayer is associated with the fact that he does not have a VAT account, therefore he will not be able to sell or purchase goods or services subject to the split payment obligation. Banks or credit unions create an additional account - the so-called VAT account. You do not need to know its number or put it on the invoice, because the payment is separated into the net amount and VAT in the bank's system automatically on the basis of the transfer message. The split payment mechanism cannot be applied where:
- the seller is not an entrepreneur;
- the seller does not have a company bank account;
- invoices are issued by a taxpayer exempt from tax on goods and services;
- the buyer is not an entrepreneur;
- the buyer settles in cash or by card.
It should be remembered that SPM can only be used by entrepreneurs from the so-called B2B sector - if the customer does not run a business, he will not be able to use split payment. The split payment mechanism can be used in the case of collective transfers. Pursuant to Art. 108a paragraph. 3a of the amended VAT Act: "In the case of issuing for the taxpayer by one supplier or service provider for a period not shorter than one day and not longer than one month, more than one invoice may be paid using the split payment mechanism".
When making collective transfers using the SPM, the transfer message should indicate the period for which the payment is made. Split payment may be voluntary or obligatory - depending on the value of the transaction and the type of goods or services the transaction concerns.
From November 1, 2019, the SPM is obligatory for invoices over 15 thousand. PLN gross, which contain at least one item from the group of the so-called sensitive goods and services specified in Annex 15 to the amended VAT Act. The obligatory application of SPM is obligatory for taxpayers who make B2B transactions - regardless of whether the buyer is an active or exempt VAT payer.
Pursuant to Art. 106e paragraph. 1 point 18a of the VAT Act, when documenting a sale that meets the above requirements, the taxpayer is obliged to include an appropriate annotation on the invoice with the following wording: "split payment mechanism". If the sales invoice is issued without the required marking, it will be possible to correct it by means of an invoice correcting the formal data or by means of a correction note issued by the buyer.
The taxpayer wants to pay for the invoice in the amount of 20 thousand. PLN gross. There is no annotation "split payment mechanism" on the invoice issued. The taxpayer made sure that the goods he purchased (foodstuffs used in the restaurant he runs) do not belong to the so-called sensitive goods and services specified in Annex 15 to the VAT Act. In this case, will the use of split payment be obligatory when making payments?
In this situation, the decision to use split payment is voluntary, as the purchased goods are not included in Annex 15 to the VAT Act. The decision on the division of payments is made by the buyer.
Mr. Zdzisław runs a photo studio and has purchased 2 digital cameras. The taxpayer received a VAT invoice from the contractor for the value of PLN 10,000. PLN gross. The purchased digital cameras belong to the so-called sensitive goods specified in Annex 15 to the VAT Act. The invoice has the annotation "split payment mechanism". The buyer wonders whether in this case, when the invoice value does not exceed PLN 15,000, PLN gross, the application of the SPM will be an obligation or a voluntary decision for him.
If the taxpayer has purchased goods or services from the group of the so-called sensitive goods and services specified in Annex 15 to the VAT Act, but the invoice value does not exceed PLN 15,000 PLN gross, then he himself decides whether he will make a payment using the SPP or a traditional transfer - despite the annotation indicated by the seller.
The entrepreneur received a VAT invoice from the contractor for the amount of PLN 16 thousand. PLN gross (the invoice was issued with the obligatory SPM). Some of the purchased goods belong to the group of the so-called sensitive goods and services specified in Annex 15 to the VAT Act. Will the obligatory application of the SPM when making a payment apply to the entire invoice?
In such a case, the obligatory application of the SPM applies only to the amount of receivables for the purchase of sensitive goods or services. The remaining amount can be settled both by ordinary transfer and by split payment - the decision rests with the buyer.
Both the buyer and the seller are sanctioned in the amount of 30% of the VAT amount for goods or services covered by SPP, if, despite the obligation, they do not settle them using a split payment.
The sanction can be avoided when:
- the seller will settle the entire amount of tax from the invoice with the tax office, which was paid without the use of the split payment mechanism - despite the existence of such an obligation;
- the buyer will apply SPM when paying for goods or services from Annex 15 to the VAT Act, despite the lack of an annotation on the invoice, then he will avoid possible joint and several liability for the tax liability of his supplier.
Detailed information on this topic is provided in the article: Mandatory split payment and additional sanctions for taxpayers.
The seller issued and sent to the buyer a VAT invoice for the sale of hard coal (goods belonging to the so-called sensitive goods specified in Annex 15 to the VAT Act) in the amount of PLN 18,000. PLN gross. The entrepreneur, when issuing the invoice, did not use the annotation "split payment mechanism". The buyer made the payment for the received invoice using the SPM in accordance with the deadline. Will the seller be sanctioned for failure to comply with the obligation to use forced split payment when issuing the invoice?
In this case, the seller will avoid tax sanctions because the buyer used SPM to pay for the issued invoice.
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MPP code in JPK_V7 - the most important information
In the JPK_V7 structure, taxpayers are required to use appropriate markings for various types of transactions - among them there are, among others MPP code for the split payment mechanism.
The use of the MPP marking in JPK_V7 applies only to transactions subject to the obligation to use the split payment mechanism - i.e. for invoices over 15 thousand. PLN gross, which relate to the so-called sensitive goods and services specified in Annex 15 to the VAT Act. Regardless of whether the split payment obligation applies to all or only part of the items on this invoice, the SPF designation in JPK_V7 applies to the entire invoice.
Even if the invoice subject to the obligatory application of the SPM does not contain the annotation "split payment mechanism", the taxpayer is obliged to use the MPP code in the JPK_V7 registration part and settle the transaction with split payment.
The VAT taxpayer issued an invoice for the gross amount of PLN 16,000 for the service related to the production of decorative elements, which is included in Annex 15 to the VAT Act. However, the invoice does not say "split payment mechanism". In this case, will the taxpayer have to apply the MPP to this transaction in the JPK_V7 file?
Yes, because the invoice meets the requirements of the mandatory SPM.
Issuing a VAT invoice from the SPM in the wFirma.pl system
In the wFirma.pl system, the taxpayer can issue VAT invoices, as well as advance and final invoices with the annotation "split payment mechanism" (more information in the article: Invoice with the annotation "split payment mechanism" - how to issue?).
In order to issue a VAT invoice from the SPP, go to the tab REVENUE »SALE» EXHIBITION »INVOICE, where you must complete the basic sales data. Then, in the ACCOUNTING sub-tab, in the ACCOUNTING SCHEME field, select the SPLIT PAYMENT option, and the "split payment mechanism" annotation will appear on the invoice printout.