A logistics company in the Mazowieckie region receives a PLN 18,000 gross invoice for transport services. The buyer pays the full amount to the supplier's main account. Three months later, a tax audit by the Krajowa Administracja Skarbowa (National Revenue Administration, KAS) flags the transaction. The buyer loses the right to deduct input VAT and faces a 30% additional tax liability. The reason: split payment was mandatory, and the buyer ignored it.

Poland's VAT split payment mechanism – known as the mechanizm podzielonej płatności (MPP) – divides a single payment into a net amount sent to the supplier's regular account and a VAT portion directed to a dedicated VAT account. The obligation is mandatory for B2B transactions exceeding PLN 15,000 gross where the invoice covers goods or services listed in a statutory annex to the VAT Act. Failure to apply MPP triggers a 30% sanction on the VAT amount and potential personal liability for the company's management.

This alert covers three things: which transactions trigger mandatory MPP, what the immediate compliance consequences are, and what your finance team must do now. The rules have been in force since November 2019, but KAS enforcement has intensified significantly in 2025 and 2026.

Which transactions trigger mandatory split payment in Poland?

Mandatory MPP applies when three conditions are met simultaneously. First, the transaction is B2B – both buyer and seller are VAT-registered in Poland. Second, the invoice value exceeds PLN 15,000 gross (or its equivalent in a foreign currency). Third, the invoice covers at least one item from the statutory sensitive-goods annex to Polish VAT legislation. All three must be present; missing any one of them removes the mandatory obligation.

The sensitive-goods list is broad. It includes construction services, steel and metal products, electronic equipment (phones, laptops, gaming consoles), fuel, coal, plastics, and waste materials. A manufacturing client in Silesia discovered in autumn 2025 that a single invoice combining exempt consulting fees with a small quantity of steel components still triggered MPP for the entire gross amount – not just the steel line. That result surprises many buyers.

Key thresholds and scope points to remember:

  • PLN 15,000 gross – the single-invoice trigger threshold
  • The threshold applies per invoice, not per transaction series
  • Foreign currency invoices are converted at the NBP rate on the invoice date
  • Partial payments do not reduce the obligation – if the invoice exceeds PLN 15,000, each payment must use MPP

The National Court Register (KRS) filings and KAS audit reports both confirm that the most common error is buyers treating the PLN 15,000 threshold as applying to the net amount. It does not. Gross value governs. A tax advisor Warsaw-based clients consult frequently will confirm: even a PLN 1 excess over the threshold activates the full mandatory regime.

Understanding MPP scope also matters for companies using IP Box or transfer pricing arrangements, because intercompany invoices for goods on the sensitive list are not exempt from MPP simply because the parties are related. For context on how Polish tax law treats intercompany obligations, see our analysis of transfer pricing safe harbours under Polish law.

What are the penalties for non-compliance with mandatory MPP?

Polish VAT legislation imposes a 30% additional tax liability on the VAT amount shown on any invoice where mandatory MPP was not applied. This sanction falls on the buyer – not the supplier. The buyer also loses the right to treat the payment as a tax-deductible cost under corporate income tax rules. Both consequences are simultaneous and irreversible once the audit finding is issued.

Personal liability is the second layer. Under Polish corporate legislation, board members and managers who knowingly authorise non-compliant payments may face personal liability for the company's tax obligations. The Polish Financial Supervision Authority (KNF) and KAS increasingly coordinate on cases involving systematic MPP avoidance in regulated sectors. A 30% surcharge on a PLN 500,000 VAT invoice equals PLN 150,000 – a figure that precludes any argument that the risk was manageable.

There is a further consequence that many companies overlook. Suppliers who receive payment outside MPP when it was mandatory are jointly and severally liable with the buyer for the VAT on that transaction. This means a supplier's VAT account may be debited by KAS even if the supplier had no control over how the buyer structured the payment. The liability chain runs in both directions.

One IT services company in Pomerania (winter 2025) faced a combined buyer-side and supplier-side audit after a series of hardware invoices – each just above PLN 15,000 – were paid without MPP. Our team secured a reduction of the assessed surcharge to below PLN 80,000 by demonstrating procedural errors in the KAS audit timeline. The underlying liability, however, could not be reversed.

What must your company do now?

Three immediate actions apply to any company issuing or receiving invoices for sensitive goods or construction services. First, audit your accounts-payable process within the next 30 days. Identify every supplier invoice above PLN 15,000 gross that includes a sensitive-goods line. Confirm whether MPP was applied. If it was not, consider a voluntary disclosure to KAS – this can reduce the 30% sanction to 20% in qualifying cases.

Second, update your ERP or accounting software to flag MPP-mandatory invoices automatically. Manual review is insufficient at any transaction volume above 50 invoices per month. The annotation "mechanizm podzielonej płatności" must appear on every invoice you issue where MPP applies. Failure to include this annotation on the supplier side also carries a separate financial penalty.

What to prepare for your compliance review:

  • List of all invoices above PLN 15,000 gross from the past 5 years (the standard KAS audit window)
  • Confirmation that your bank has activated a VAT account (rachunek VAT) for your company
  • ERP configuration documentation showing MPP flagging logic
  • Supplier contracts identifying goods or services that fall within the sensitive-goods annex

Third, align your MPP compliance review with your KSeF readiness programme. From 2026, the mandatory e-invoicing system will create a direct data bridge between invoice records and KAS. Any MPP discrepancy visible in your KSeF data will be flagged automatically. For the KSeF timeline and its interaction with VAT reporting, see our alert on the KSeF deadline timeline for 2026–2027. Companies operating in sectors involving real estate or construction should also review BREEAM and LEED certification legal implications in Poland, as construction invoices are among the highest-risk MPP categories.

The specific circumstances of your company's invoice portfolio determine whether past exposure is material. A targeted review now – before a KAS audit opens – is the only action that forfeits nothing and preserves every available defence.

To receive an expert assessment of your MPP compliance position, contact info@kordeckipartners.com.

Frequently asked questions

Q: Does mandatory MPP apply to invoices paid in instalments?

A: Yes. If the total invoice value exceeds PLN 15,000 gross and covers a sensitive-goods item, every instalment payment must be made using the split payment mechanism. The threshold is assessed against the full invoice amount, not the individual payment instalment. Splitting a payment into smaller tranches does not remove the MPP obligation.

Q: Can a family foundation registered in Poland receive MPP payments into its VAT account?

A: A family foundation conducting business activity that makes it a VAT-registered entity is subject to the same MPP rules as any other VAT taxpayer. The foundation form does not create an exemption. If the foundation issues invoices for sensitive goods above PLN 15,000 gross, it must annotate those invoices with the mandatory MPP notation and maintain a VAT account at a Polish bank.

Q: How long does KAS typically take to issue an MPP non-compliance assessment?

A: KAS audits covering VAT periods from 2021 onward are currently being completed within 6 to 18 months of the audit opening. The standard limitation period for VAT obligations under Polish tax law is 5 years from the end of the calendar year in which the tax obligation arose. Acting within 30 days of identifying a potential non-compliance – before any audit opens – gives the strongest basis for a reduced sanction under voluntary disclosure rules.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to VAT compliance, MPP implementation, and KAS audit defence. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.