Tax-deductible costs and unjustified marking of invoices with an annotation about SPM


The introduction of the mandatory split payment mechanism (the so-called SPM) has changed the way entrepreneurs issue invoices and settle transactions. At the same time, sanctions were introduced in the VAT Act related to the failure to apply the mandatory split payment. The change in the method of issuing invoices led to a situation in which a large part of entrepreneurs, wanting to avoid incorrectly issued invoices, included an additional annotation "split payment mechanism”On all sales invoices. From January 1, 2020, the legislator introduced further restrictions, this time on the basis of income tax, related to the split payment mechanism, i.e. the possibility of recognizing the expenditure in tax costs. Are tax deductible costs and unjustified marking of invoices with an annotation about SPM contradictory? Let's check it out!

When do invoices have to be annotated about the SPM?

Pursuant to Art. 106e paragraph. 1 point 18a of the VAT Act, the invoice must contain an additional note "split payment mechanism"If 3 conditions are met:

  • the transaction is concluded between taxpayers,
  • at least one item of the invoice has been listed in Annex 15 to the VAT Act,
  • the gross value of the invoice exceeds PLN 15,000.

If the above three conditions are met, the buyer is obliged to make the payment using the split payment mechanism. If the gross value of the invoice does not exceed PLN 15,000, the buyer has the right to pay voluntarily using the split payment mechanism, but is not obliged to do so. In questions and answers regarding the split payment mechanism, the Ministry of Finance presented a position that allows taxpayers to annotate about SPM even in a situation where the obligatory split payment does not apply:

"[...] the taxpayer may include information about SPM on the invoice, even if the gross value of the invoice does not exceed PLN 15,000. zloty. The provisions regulating the scope of data on the invoice define the elements necessary to be included. The taxpayer may include other information in addition to them, which is not in violation of the "invoice" provisions. Also, from the point of view of the Fiscal Penal Code, an invoice containing, apart from the necessary elements, additional information, is not a defective invoice ”.

However, it should be borne in mind that the answers to the questions that are available on the website of the Ministry of Finance are not binding and the entrepreneur will not be legally protected in the event of a possible inspection. More about the annotation "split payment mechanism" in the articles:
- Mandatory split payment - how does it work and who does it apply to?
- How to pay an invoice using the split payment mechanism?
- Invoice with the annotation Split payment and JPK FA - new structure
- Split payment mechanism in practice - good to know
- Advance payment in split payment - is it at all possible?

Example 1.

Mr. Łukasz purchased construction materials listed in Annex 15 to the VAT Act. He received an invoice for PLN 16,000 gross, but the seller did not include the annotation "split payment mechanism" on the invoice. Is Mr. Łukasz obliged to pay using split payment?

Yes, if the transaction is subject to the obligatory split payment mechanism, even if the invoice is not annotated by the SPM, the buyer is required to make the payment using split payment in order to avoid VAT sanctions. If the entrepreneur fails to make the payment using split payment despite such an obligation, an additional tax liability may be imposed on him in the amount corresponding to 30% of the VAT amount for the purchased goods or services listed in Annex 15 to the Act, shown on the invoice to which the payment relates. .

Tax-deductible costs and unjustified marking of invoices with an annotation about SPM

As of January 1, 2020, the catalog of situations in which the entrepreneur is not entitled to include the expenditure in tax costs has been expanded. Pursuant to Art. 22p paragraph. 1 point 3 of the PIT Act, the taxpayer does not include the expenditure in the part in which the payment was made without the split payment as tax deductible costs, despite the fact that the sales invoice contains the annotation "split payment mechanism”.

The above wording of the regulations led to a situation in which the seller, when issuing an invoice for a transaction not covered by the obligatory split payment, added an additional annotation about SPM, thus abolishing the right to voluntary use of split payment by buyers. Failure to pay the invoice, which contains an additional note on SPM, would result in the inability to include such an expense in the costs by buyers.

However, on this subject, an individual ruling of November 15, 2019, ref. No. 0111-KDIB1-1.4010.387.2019.1.SG, where we read that:

"[...] despite marking the VAT invoice with the" split payment mechanism "clause, in a situation in which it turns out that the goods or services purchased by the Applicant do not fall within the scope of goods and services listed in Annex 15 to the VAT Act, the Applicant will not be the exemption from tax deductible costs applied […] ”. If the transaction is not covered by the mandatory split payment mechanism, the taxpayer may include it in tax deductible costs, and unjustified marking the invoice with an annotation about SPM will not result in imposing additional sanctions on the buyer.

Example 2.

Mr. Aleksander purchased office supplies for PLN 5,000 gross. On the issued invoice, the seller included the annotation "split payment mechanism". Is Mr. Aleksander required to pay using a wire transfer message or can he make the payment from a private bank account?

Due to the fact that the gross value of the transaction did not exceed PLN 15,000, Mr. Aleksander is not obliged to make the payment using the transfer message. Despite making a payment from a private ROR account, it will be able to recognize the invoice as tax deductible costs, and unjustified marking invoices with an annotation about SPM will not cause additional consequences. Start a free 30-day trial period with no strings attached!

How to book an invoice with an annotation about the SPM in the system?

In order to include in the costs an invoice that contains an annotation "Split payment mechanism", go to the system to the tab: EXPENDITURE »ACCOUNTING» ADD »VAT INVOICE, where, after filling in the required fields, go to the sub-tab IMPORT FROM ABROAD AND OTHER ADVANCED and select the option SPLIT PAYMENT.

Thanks to this, after saving, it will be possible to filter out invoices in the table for which split payment applies.

In order to pay the expenditure directly from the system with the use of the split payment mechanism, in the tab: EXPENSES »ACCOUNTING, select the invoices on the list and select the option EXPORT TO BANK» SPLIT PAYMENT from the top menu.

Payment with the use of the split payment mechanism is possible only if both parties to the transaction have a company settlement account for which the bank maintains a special VAT account. In the case of transactions over PLN 15,000, entrepreneurs must also verify that the transfer they make is ordered to the bank account number that is on the white list of VAT taxpayers. Otherwise, they risk jointly and severally liable, more on in the article: New joint and several liability - what is it and how to avoid it?