Extension of the Institute of Liability for Unpaid VAT and Split Payment

The “Tax Liability Institute” will also be applied in situations where the customer knew or may have known that the supplier would not fully or in part pay the tax to the Tax Administrator.

This presumption may occur in situations where a customer or a third party pays an invoice for the delivered goods or services to the bank account of a supplier not registered by the Financial Administration in the vendor's bank account list. From 1 January 2022, the list of bank accounts registered by the Financial Administration will be updated daily on the Financial Administration website.

The tax liability institute will be applied if the supplier does not pay the tax to the tax administrator within the due date. Otherwise, the tax administrator will be entitled to request this payment from the customer.

For entrepreneurs, verifying their suppliers' bank accounts is an increased administrative burden. If a customer wants to avoid liability for tax, he can use the so-called split payment.

The special method of payment of the tax, the so-called “Split payment”

The risk of applying the liability institute for unpaid tax can be eliminated by the customer by splitting the payment by paying the amount of VAT directly into a separate account of the supplier held with the tax administrator. After such distribution of the  payment, the tax administrator no longer applies the tax liability institute to the customer.

If the customer pays the tax for the supplier who fulfils his payment obligations within the due  date, the tax paid by the customer will be the supplier's tax overpayment.