The Director of the National Tax Information Service on June 26, 2018 issued individual interpretation No. 0114-KDIP1-1.4012.332.2018.1.KBR confirming the rules for applying the provisions of Article 108a (5) et seq. of the VAT Act to factoring companies. This interpretation reaffirms the position that the factoring company will not be liable for the VAT not settled by the factor, only if it pays him (the advance) itself according to the split payment mechanism. This position is in line with the factoring industry's interpretation of the regulations, so it should be seen as a confirmation of the new legal position.
The interpretation itself was issued at the request of a factoring company which, in connection with the introduction of the split payment mechanism as of 1.07.2018, decided to change its regulations and start paying advances in the form of split payment. The interpretation is worth noting also for the reason that it describes in detail the problem itself and the application of the new regulations by factoring companies. The interpretation is available HERE. The interpretation is consistent with my entry dated 29.06.2018. which is a prediction of the impact of split payment on factoring.
