How VAT Bank Account Works: Understanding Its Mechanics and Impact

ByMateusz

When you open a business account in a Polish bank, you automatically receive an additional bank account – a VAT account. This is not just any addition, but a special account designated for VAT settlements. Think of it as a dedicated space where VAT waits its turn to be properly allocated.

Specificity of the VAT account: This account has its unique rules – it’s not a place for any transactions, but only those strictly related to VAT. Deposits and withdrawals are only possible in specific cases, giving the VAT account the character of a specialized tool 🔧.

Moments when money flows into the VAT account:

  • Split Payment: When your invoice is paid as part of the split payment mechanism, the net amount goes to your main business account, and the VAT part goes to your VAT account. The decision to use this form of payment is up to your contractor.
  • VAT refund from the tax office: Typically, waiting for a VAT refund takes up to 60 days. However, if you prefer the refund to your VAT account, the tax office will make it within 25 days .

Allowed withdrawals from the VAT account:

  • You can use the funds accumulated in the VAT account to settle VAT-related liabilities for the purchase of goods or services, as well as to pay taxes and social security contributions (ZUS).

Remember, the VAT account is not for transferring funds between your accounts.

VAT Accounts in the IT Sector: The VAT account is a tool with limited use, which finds its application in some industries, like wholesale trade. However, in the IT sector, the VAT account often remains unutilized.