Split payment
As a reminder, the split payment is a mechanism whose basic assumption is the splitting of payments for delivered goods and services into the net amount and the amount of VAT, which will be paid to the supplier’s separate accounts at the bank: a current account and an additional VAT account. Subsequently, using this account, a counterparty will pay their liabilities related to tax on goods and services, resulting from invoices received from their suppliers, and to tax authorities.
Until now, the decision to join the mechanism was to be taken by the buyers who received an invoice with an indicated amount of tax. The participation in it was formally voluntary, however the legislation introduced a number of benefits of applying the split payment mechanism to encourage entrepreneurs to use it. These benefits include: obtaining a VAT refund on the VAT account within a shorter period, a reduction in the amount of tax payable in the event of paying VAT from the VAT account before its due date.
Who is obliged to apply split payment?
The split payment must be applied when all of the following conditions are met:
- the tax obligation, the delivery of goods or services and the date of invoice fall after 31 October 2019,
- the gross value of the transaction is more than PLN 15 thousand or its equivalent,
- at least one invoice item is covered by Appendix 15 to the amended VAT Act,
- the seller and the customer are taxpayers (B2B transaction, regardless of whether the buyer is an active or exempt VAT taxpayer).
A solution from SNP Poland
To meet the needs of customers, SNP Poland (now All for One Poland) has developed a solution called All for One Split Payment, which enables the fulfilment of requirements set by the split payment mechanism in the SAP system.
Assumptions and functionality
The following assumptions were taken into account when designing the product:
- The solution allows you to handle payment media generated both using the Payment Medium Workbench as well as the classic program (a copy of the standard J_1P0042 program).
- The solution works on the basis of a dedicated or existing payment method that meets the following conditions:
– a payment method for outgoing payments,
– a single payment for the selected item.
- The payment method appears in the supplier’s item.
- The VAT amount can only be calculated directly on the basis of an FI document that is included in the payment.
- A single payment is generated for one invoice, in accordance with the requirements set out in the Act.
- There are no significant changes in the method of posting bank statements for the basic account if the Split Payment is visible as two separate operations on the statement (for the gross amount and the VAT amount).
- Electronic bank statements should be configured for VAT accounts.
- The counterparty’s TIN number is stored in one of the standard fields available in the general master data record: tax number 1/2/3/4, VAT identification number.
- All for One Split Payment applies to payments made in PLN currency.
For the effective implementation of the solution, at least the SAP ECC 6.0 version is required, however it is also possible to apply it to older versions of the system after making small adjustments. It is worth noting that the basic requirement is to pre-configure the outgoing payments in PLN currency on the system – if this functionality is not used, it must be configured before the product is launched.
All for One Split Payment also interoperates with the In-House Cash module in the field of handling outgoing payments, provided, however, that the sending and paying business entities are configured on one system.
The product supports all bank formats for domestic payments available to Polish SAP customers, provided that they are generated using the Payment Medium Workbench or the J_1P0042 program.
In addition, the standard version of All for One Split Payment supports the majority of the most common forms of payment in the Polish business environment, such as direct debits, partial payments or residual items. Other forms, such as set-off payments, can be implemented as part of individual implementations, using specially prepared BAdi extensions.
Implementation of the solution
The solution is delivered to the customer’s system via transport files. In addition to transport files, the basic package includes also a license to use the product and its documentation.
The product must be customized according to the individual specifics of the payment processes carried out in the SAP system. There are two implementation options available:
- carrying out work using own resources, based on the provided documentation and instructional materials (the customization of the solution requires the SAP system configuration and programming skills),
- entrusting the preparation of the customization to SNP consultants (analysis of necessary customizations, customization work and putting the product into operation).
Legal view
- The basis for the product development is the amendment to the Act on Tax on Goods and Services and certain other acts of December 15, 2017
- The amendment introduces a split payment mechanism: payments for delivered goods and services will be divided into the net amount and the amount of VAT, paid to separate bank accounts of the supplier
- The changes will enter into force on July 1, 2018
- The introduction of the solution necessitates the adaptation of IT systems in the area of handling bank messages for split payment (including providing information on the VAT amount, the contractor’s TIN number, the number of the invoice for which the payment is made)