Concluding the exposition regarding the new Split mechanism, we recall that the Law grants the maximum period of 30 days to transfer the VAT-related sum to the escrow account in the case of payments:

– Cash/credit cards;

– by persons not required to adopt the Split (e.g., individuals, nonresidents or persons not registered for VAT);

– Payments made before the obligation came into effect but received later.

As a reminder, the regulations strictly require entities that apply the Split not to use the sums in the escrow account in any way except for payments of the tax itself to other entities; any transfer from the escrow account of sums to the regular account will have to be justified in the audit.

In the case of an error in payment by the customer who did not distinguish between the flow of taxable income and the flow of tax, the payer will not be sanctioned only if the supplier has proceeded within 30 days (legitimately in this case) to transfer the amount of tax to the escrow account.

Otherwise, the penalties to be paid by the client are 0.06/day of the tax incorrectly paid into the supplier’s escrow account.

We recommend that entities adopting the Split communicate the details of the escrow account to their customers in a timely manner.

In view of the particularly complex subject matter, we point out that disclosures, which by their structure are concise, are not a substitute for a thorough review of the individual case in any case. We therefore recommend that for any need to inform the Firm, in a timely manner, so that the mechanism can be monitored in time.