27.07.2026
On 1 October 2026, an amendment to the VAT Act currently being considered by the Sejm is expected to enter into force. The amendment would extend the joint and several liability provided for in Article 105a of the Act to intangible services.
The bill has already passed its first reading in the Sejm and was also the subject of parliamentary question No. 17612. The response to that question provided additional clarification regarding the scope and interpretation of the proposed changes.
Under the proposed rules, where a purchaser knew that an invoice documented a transaction that had not actually been performed, contained information inconsistent with the facts or had been issued by a non-existent entity, payment using the split payment mechanism will not protect the purchaser from joint and several liability.
Although the amendment is intended to combat tax fraud, in practice it will significantly increase the obligations imposed on purchasers of services.
Greater emphasis on due diligence
Taxpayers will be required to demonstrate not only that the transaction was accounted for correctly, but also that the supplier was genuinely verified and that the service was actually performed.
This is particularly challenging in the case of intangible services. Advisory, marketing and consulting services, as well as IT support, do not usually leave evidence as clear and tangible as that generated by the physical supply of goods.
The authorities’ existing practice gives little cause for optimism
This issue is highly problematic from the taxpayer’s perspective because tax authorities often interpret taxpayers’ due diligence obligations very broadly and rigorously, and sometimes even unreasonably.
There have been cases in which a tax authority treated complete and comprehensive documentation concerning the verification of a supplier as evidence that the taxpayer itself had doubts about the reliability of its business partner and should therefore have suspected, or even known about, an attempted fraud.
In other cases, businesses were expected to conduct in-person inspections of the physical premises of foreign suppliers, including, for example, suppliers based in Cyprus.
These examples demonstrate that the assessment of due diligence is unfortunately often highly discretionary and may lead to numerous disputes with the tax authorities in the future.
How should businesses respond?
Experience from previous disputes concerning joint and several liability indicates that an effective defence will require cooperation between several areas of the business. For example:
- the procurement department, supported and instructed by accounting and tax personnel, could be responsible for obtaining and maintaining documentation demonstrating the proper verification of the supplier’s business activities and the reasons for selecting that supplier;
- the finance and accounting teams, drawing on their knowledge, experience and recommendations, could also be responsible for verifying invoices and bank accounts, checking whether the supplier appears on the VAT White List and carrying out other relevant checks;
- commercial departments could support the collection of evidence confirming that the service was actually performed and that the remuneration was consistent with market conditions.
Only the combined involvement of these three areas will enable the business to demonstrate that it exercised due diligence in the event of an inspection.
It would also be good practice to create a complete documentation package for each invoice relating to the provision of services. Such a file should include, in particular:
- an agreement or statement of work describing the scope and expected deliverables of the service;
- acceptance protocols, reports or other evidence that the service was performed;
- documentation of the supplier verification process, including its VAT status, presence on the VAT White List and entry in the National Court Register or Central Register and Information on Business, together with the date of the verification and the identity of the person who performed it;
- a comprehensive justification of the market level of the remuneration.
Documentation prepared in this manner may prove decisive during a tax inspection or a dispute with the tax authorities.
It is worth preparing now
Businesses should already identify the areas of greatest risk, review their existing due diligence procedures and implement systemic solutions supporting supplier verification and document retention.
The earlier businesses prepare for the new obligations, the easier it will be to reduce tax risk once the provisions enter into force, while also minimising disruption to key procurement processes and limiting the impact of the new requirements on relationships with suppliers.
We would be pleased to support you both in assessing the impact of the new regulations on your business and in developing and implementing effective due diligence procedures.
