Funds held in a VAT account – how to cash them?

Are you using the split payment and got funds in your VAT account? If so, you have got the right to request for them to be transferred onto your company account. There is no need to provide any justification for it. Once your funds are transferred, you can cash them freely.

VAT account – what is it?

VAT account is a type of settlement account designed to settle VAT and make split payment settlements. Nonetheless, using the funds accumulated there is limited. You can use VAT account pay, for instance, ZUS contributions, taxed related to VAT returns or customs duties.

Starting with 1 July 2018, any VAT account is opened automatically to company bank accounts with Polish currency.

Split payment – what is it?

Split payment is a model in which the buyer pays the invoice with just one transfer, but the amount is split into a net amount and VAT. The net amount goes to the seller’s settlement account and the VAT goes to the VAT account.

This mandatory split payment applies when three conditions are met:

• the sales value is at least PLN 15 000 gross;
• at least one item on the invoice is listed in Appendix 15 of the VAT Act (this includes the supply of goods and services to which the reverse charge applied before 1 November 2019);
• the sale is made between taxable persons – B2B (regardless of whether the buyer is an active or exempt VAT payer).

Request for transfer of funds in a VAT account – things to remember

• the application should be addressed to the relevant tax office,
• you can submit it at any time,
• you do not have to provide any justification as to how you will use the funds,
• the application is free of stamp duty,
• it will be processed within 60 days of its submission.

If the Head of Tax Office:

• approves of the transfer of funds from the VAT account, an order specifying the amount to be transferred to the settlement account is issued. This information shall be delivered directly to the bank that takes care of the settlement account and the VAT account. Following the issued order, the VAT account funds are immediately transferred to the settlement account.

You have the right to make a complaint if you do not agree with the issued order, for example, if the amount you requested is lower than the one specified in the said order.

• does not approve of the transfer of funds from the VAT account, a decision refusing to transfer the funds in the VAT account is issued. Such decision takes place, for example, when you have tax arrears.

Legal basis:
art. 108a par. 1, art. 108a par. 1a, art. 108b of the Act of 11.03.2004 on tax on goods and services (consolidated text Dz. U. of 2022, item 931 as amended).

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