LOTOS introduces a split payment mechanism
Grupa LOTOS S.A. announces that, starting from July 1st 2018, all payments made by the LOTOS Group companies based on purchase invoices will be made under the split payment regime.
The split payment mechanism has been introduced by the Act Amending the Value Added Tax Act and Certain Other Acts of December 15th 2017 (Dz.U. of 2018, item 62) amending, among others, the Value Added Tax Act of March 11th 2004 (Dz.U. of 2017, items 1221 and 2491). The Company decided to apply this solution taking into account the ‘Methodology for assessing the exercise of due care by buyers of goods in domestic transactions’, published on the websites of the Polish Ministry of Finance.
Under the split payment regime, payment for a purchased good or service is to be split into amounts paid into two separate accounts. From a VAT-inclusive amount paid into the seller's account after July 1st, the bank will automatically split the VAT amount and transfer it to a separate VAT account. This solution applies exclusively to transactions made with VAT payers (including foreign entities registered as active VAT payers), i.e. to B2B transactions, and has no impact on purchases made by consumers (who are not business entities).
By choosing the split payment option, the buyer will be able to compellingly demonstrate that it exercised due care when entering into a transaction with a trading partner, which will be important for security of the buyer’s input VAT. The solution is designed to make VAT collection more efficient by preventing VAT fraud schemes.