1 January 2024 - new obligations for payment service providers

CESOP is intended to facilitate collecting, storing, aggregating and analysing data on payment recipients and cross-border payments relevant for VAT. Data from CESOP will be used to detect VAT fraud and abuse related to e-commerce in particular.

Read more about E-commerce tax changes: Changes to e-commerce - CESOP Regulation

CESOP - who will be covered by the new responsibilities?

Under the new provisions of the VAT Act, the following entities will be required to report to CESOP:

• domestic banks within the meaning of Article 4(1)(1) of the Act of 29.08.1997. - Banking Law; 
• branches of foreign banks within the meaning of Article 4 (1) item 20 of the Banking Law; 
• credit institutions within the meaning of Article 4(1)(17) of the Banking Law;  
• branches of credit institutions within the meaning of Article 4(1)(18) of the Banking Law; 
• electronic money institutions;  
• branches of electronic money institutions, if the branch is located in a Member State and the head office of such institution is located outside the Member State, insofar as the payment services provided by the branch are related to the issuance of electronic money; 
• branches of entities providing postal payment services in a Member State other than the Republic of Poland, authorised under the law of that State to provide payment services, and of Poczta Polska SA to the extent that separate regulations authorise it to provide payment services; 
• payment institutions within the meaning of the Act on payment services; 
• cooperative savings and credit unions and the National Cooperative Savings and Credit Fund within the meaning of the Act of 5.11.2009 on cooperative savings and credit unions, to the extent that separate regulations authorise them to provide payment services. 

These entities will be obliged to report specific payment services to CESOP if payment services corresponding to more than 25 cross-border payments to one payment recipient were provided during a quarter. It is therefore crucial for obliged entities to establish the relevant data identifying the payment recipients. If a single recipient uses multiple payment identifiers, the threshold of 25 transactions should be determined for all identifiers together.

What is reported to CESOP?

Institutions required to report to CESOP must collect data on payment services consisting of:

• performing payment transactions, including the transfer of funds to a payment account with the user's payment service provider or with another provider:

• by the execution of direct debit services, including one-off direct debits,
• by means of a payment card or similar payment instrument,
• by the execution of credit transfer services, including standing orders,

• performing the payment transactions listed above against funds made available to the user by way of credit and, in the case of a payment institution or electronic money institution;
• issuing payment instruments;
• enabling acceptance of payment instruments and execution of payment transactions;
• providing a money transfer service.

The data collected by the obliged payment service providers should be included in the CESOP records. According to the amendments to the VAT Act, records in electronic form must be kept for each quarter if the threshold of 25 cross-border payments to one and the same recipient of the payment has been exceeded in the quarter.

The records should include:

1. BIC or other identification code that uniquely identifies the payment service provider; 
   
2. name and surname or business name of the recipient of the payment as held by the payment service provider; 
   
3. the number by which the recipient of the payment is identified for tax or value added tax purposes, or any other number by which the recipient is identified for tax purposes, if available; 
4. IBAN or, if IBAN is not available, another identifier that uniquely identifies the recipient of the payment and its location; 
5. if the payment recipient receives funds without having a payment account, the BIC or other identifying code that unambiguously identifies the payment service provider acting on behalf of the payment recipient and its location; 
6. the address of the payment recipient, if available, as held by the payment service provider; 
7. data on cross-border payments and on payment refunds identified as relating to cross-border payments:  

• the date and time of the payment or reimbursement,
• the amount and currency of the payment or refund,
• the Member State of origin of the payment received by or on behalf of the payee or the Member State of destination of the refund, as appropriate, and the information used to identify the origin, 
• information other than that listed in points (a) to (c) which unambiguously identifies the payment,
• where the payment is initiated at a merchant's premises, information on the physical presence of the payer at the initiation of that payment.

By when is the first CESOP report due?

The data collected in the records are subject to electronic reporting to the Head of KAS or to the Member State of origin of the payment service provider, if the payment services covered by the reporting are provided by a foreign entity. CESOP reports should be sent at the latest by the end of the month following the quarter to which the records relate.

The first CESOP report should therefore be sent to the competent authorities by 30 April 2024. The Ministry of Finance will transfer the collected data to the central register by 10 May 2024.

The Ministry of Finance has already launched an API environment for the test upload of XML files containing CESOP records. On the MF website, it is therefore possible to test communication with CESOP and familiarise yourself with the data structure of the records in XSD format: Swagger UI (mf.gov.pl). For details on the handling of the CESOP environment, please refer to the JPK 4.0 Service Interface Specification.

MF website dedicated to CESOP (in Polish only): Dostawcy usług płatniczych - Ministerstwo Finansów - Krajowa Administracja Skarbowa - Portal Gov.pl (www.gov.pl)

Tax compliance - how can we help?

Taking into account the frequent changes in the tax law, the implementation of tax reporting obligations can be a challenge for many businesses. Crowe's team of experts rely on many years of experience in, among other things, reporting for tax purposes to offer comprehensive support in reporting, tax settlements and tax compliance including:

• registering taxable person for CIT and VAT,
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Learn more: Tax compliance - explore our services