The Public Finance Commission received a draft amendment to the VAT Act. One of the proposed changes is the introduction of a mandatory split payment in some industries. The aim of implementing new regulations is to further tighten the VAT system.
The split payment mechanism consists in dividing the payment for the invoice into two parts. The net amount goes directly to the bank account of the supplier, the amount of VAT to a separate VAT account of the supplier. At present, the system is voluntary.
The obligation to implement the split payment will apply, among others, to the construction industry, trade of electronic devices, fuels, coal, steel and waste. The system will not cover cash payments.
Due to the demands of entrepreneurs who have to adjust their accounting processes to the changes, the effective date of the regulation has been postponed from 1 September to 1 November 2019.