Split payment system and invoice correction

Service-Tax

As you know, the entry into force of the new regulations regarding the split payment system seems to be only a matter of time. Currently, the Sejm will consider the Senate's amendments, and according to the draft, the act is to come into force on April 1, 2018. What is the split payment system like in the context of invoice correction? Check below.

Split payment system, i.e. split payment

Some general assumptions of the split payment system are known from the legislative work to date. Let us recall the most important of them:

  • the essence of this solution consists in the fact that the payment for the purchased goods or service is made in such a way that the payment corresponding to the net sales value is paid by the buyer to the supplier's settlement account or is settled in another way,

  • while the payment corresponding to the amount of tax on goods and services is paid to a special bank account of the supplier, the so-called VAT account,

  • the split payment mechanism will apply only to transactions made to other taxpayers, i.e. to B2B transactions,

  • split payment is based on voluntary application.

As proposed, the draft act provides in the wording of Art. 108a paragraph. 3 possibility of paying with the use of the split payment mechanism using the so-called transfer message. In this communication, the taxpayer is obliged to indicate:

1) the amount corresponding to all or part of the tax amount resulting from the invoice to be paid in the split payment mechanism;

2) the amount corresponding to all or part of the gross sales value;

3) the number of the invoice in relation to which the payment is made;

4) the number by which the supplier of the goods or the service provider is identified for the purposes of the tax.

In the case of issuing a correcting invoice, the supplier who has received the payment under the split payment mechanism also returns it using the transfer message.

Invoice correction and the split payment system

Such a solution is provided for in the draft act in the wording of Art. 108a paragraph. 4, which provides that in the cases of reducing the tax base referred to in article 1. 29a paragraph. 10 points 1-3 and par. 14 of the VAT Act, a refund of all or part of the payment may be made using a transfer message, in which, in place of the information on the supplier's tax identification number, the taxpayer indicates the customer's tax identification number (NIP). Other elements that should be supplemented with the transfer message in accordance with the above-mentioned regulation, remain unchanged. In other words, issuing an invoice correction that reduces either the tax base or the tax amount obliges the seller to refund the payment to the buyer. He also returns this amount by means of a transfer message, with the difference that instead of the supplier's NIP number, the transfer message should include the NIP number of the buyer who is returned a specific value resulting from the correcting invoice.

As can be seen, in the content of the above-mentioned Art. 108a paragraph. 4, there is no appeal from the legislator to indicate in the transfer message the number of the correcting invoice, which would suggest that in the field concerning the invoice number, in the case of issuing an invoice correction, the number of the original invoice should be indicated (Article 108a (3) in conjunction with Article 108a ( 4).

It seems that from a practical point of view and the assumptions of the legislator himself - related to, inter alia, however, the payment may refer to only one invoice (the bank cannot execute the so-called batch of transfers) - failure to refer to the invoice correction number when returning the payment is incorrect. This request is justified if the content of Art. 106j points 2 and 3 of the VAT Act, specifying the elements of the correcting invoice. This is because it requires that the next number of the correcting invoice be assigned, and additionally, in the content of this document, reference is made to the elements of the original invoice, e.g. the invoice number.

The obligation to leave the number of the original invoice in the transfer message, in the event of issuing a correcting invoice, may cause difficulties related to the correct assignment of certain payment returns to specific invoices. Therefore, it seems that the taxpayer supplier / service provider, when issuing a corrective invoice and refunding the payment using a transfer message, in the field referred to in art. 108a paragraph. 3, point 3, should indicate, next to the number of the original invoice, also the number of the correcting invoice, which can be linked to the original invoice.