VAT Split Payment in Poland 2026 – How MPP Works, Who It Applies To and What’s Changed
Poland’s VAT split payment mechanism (mechanizm podzielonej płatności, MPP) has come a long way since it was first proposed in 2015 and introduced as a voluntary system in 2018. Today it is a mandatory requirement for a broad range of high-risk B2B transactions and has been formally extended until February 2028. Here is everything businesses need to know about how it works in 2026.
What Is the Split Payment Mechanism?
Split payment (MPP) is a VAT payment method in Poland where the bank automatically splits a transfer into two streams: the net amount goes to the seller’s standard business account, and the VAT amount goes to a separate, ring-fenced VAT account maintained by the bank.
The VAT account is established automatically by the bank for every business holding a PLN settlement account. The seller cannot freely access funds held in the VAT account — they are ring-fenced for statutory purposes, primarily for settling VAT obligations with the tax authority.
The legal basis for the mechanism is found in Articles 108a–108f of the Polish VAT Act.
From Voluntary to Mandatory: A Brief History
The split payment system was first introduced in Poland in July 2018 on a voluntary basis. Sellers who opted into the system were relieved from certain anti-fraud obligations, including joint and several liability for a customer’s unpaid VAT. The system proved effective — before mandatory split payment was introduced, the value of VAT fraud in Poland amounted to nearly PLN 5.2 billion in 2018. By 2022, this figure had fallen to just under PLN 1.7 billion.
Mandatory split payment for selected high-risk goods and services was introduced in November 2019 and has been progressively expanded since.
When Is Split Payment Mandatory in 2026?
Split payment is mandatory when all three of the following conditions are met simultaneously:
- The gross invoice value exceeds PLN 15,000
- The invoice includes at least one item listed in Annex 15 of the Polish VAT Act
- The transaction is between two VAT-registered businesses (B2B)
All three conditions must apply at the same time. If any one of them is not met, mandatory split payment does not apply — though voluntary use remains available for any B2B VAT invoice.
What Goods and Services Are Covered by Annex 15?
Annex 15 to the Polish VAT Act lists over 150 categories of goods and services considered at high risk of VAT fraud. Key categories include: steel products and other metals, electronic goods (including smartphones, laptops, and tablets), fuel and mineral oils, construction services, coal and coal products, precious metals and jewellery, plastic and rubber waste, vehicle parts, and certain chemical products.
The annotation “mechanizm podzielonej płatności” must appear on any invoice where mandatory split payment applies. The seller is required to include this annotation — failure to do so carries a penalty of up to 30% of the VAT amount on the invoice.
Penalties for Non-Compliance
Both buyers and sellers face penalties for failing to apply mandatory split payment correctly:
A buyer who fails to use mandatory split payment risks an additional tax liability of 30% of the invoice VAT, loss of the right to deduct the expense as a tax-deductible cost, and joint liability for the seller’s unpaid VAT. A seller who fails to include the “mechanizm podzielonej płatności” annotation on the invoice faces a penalty of up to 30% of the VAT amount and potential fiscal criminal liability.
The 30% buyer penalty does not apply if the seller has correctly settled the full VAT amount — but this does not exempt the buyer from fiscal criminal liability.
What Can the VAT Account Be Used For?
Funds held in the ring-fenced VAT account are restricted but not completely inaccessible. They can be used to: pay VAT to the tax authority, pay the VAT portion of incoming invoices under split payment, pay import duties and customs charges, repay VAT loans, and — upon application to the tax authority — be released to the business’s regular account. Applications for release are typically processed within 60 days.
Split Payment Extended Until 2028
Because mandatory split payment departs from the standard EU VAT framework, Poland requires a derogation from the EU Council to maintain it. On 18 February 2025, the EU Council approved the extension of Poland’s mandatory split payment mechanism until 28 February 2028 via Council Implementing Decision (EU) 2025/373.
This confirms that the mechanism will remain in force throughout 2026 and 2027, giving businesses certainty for their compliance planning.
Split Payment and KSeF — Two Separate Obligations
From 2026, Poland’s mandatory e-invoicing system (KSeF) is also in force for most businesses. It is important to understand that KSeF governs how invoices are issued and transmitted, while split payment governs how invoices are paid. The two obligations are independent — issuing an invoice through KSeF does not alter split payment obligations, and routing a payment through split payment does not change KSeF requirements. When both sets of conditions are met, both apply simultaneously to the same transaction.
Within KSeF, the MPP annotation is handled as a dedicated field in the FA(3) XML schema.
Summary
Poland’s split payment mechanism is a well-established and effective anti-fraud tool, now extended until February 2028. The key points for businesses in 2026:
- Mandatory when: gross invoice over PLN 15,000 + Annex 15 goods/services + B2B transaction
- Voluntary for any other B2B VAT invoice
- Penalties: up to 30% of VAT for both buyer and seller non-compliance
- Extended until 28 February 2028 by EU Council decision
- KSeF and MPP are separate obligations that can apply simultaneously
For questions about VAT split payment compliance in Poland, our team is ready to help: Contact us — amavat®
