New explanation of the National taxation Administration changes the rules of the game
The latest explanation of the head of the National taxation Administration (KAS) can make crucial changes to Polish labour law and affect worker contracts. In consequence to the company's request for a popular method of hiring employees under B2B contracts, KAS issued a negative opinion. This decision coincides with the government's work on fresh government that could bring about a revolution in the labour market.
KAS on B2B contracts: ‘artificial self-employment’
The KAS explanation of 12 June, published by ‘Gazeta Wyborcza’, cites the case of an anonymous company that asked about the legality of hiring workers on B2B contracts. The answer indicates that this form of employment may in many cases be illegal. This is peculiarly the case erstwhile a individual provides services to only 1 entity, which according to the KAS is simply a form of ‘artificial self-employment’.
Government prepares fresh legislation
The government is besides taking steps to regulate the B2B labour market. The Minister of Family, Labour and Social Policy, Agnieszka Dziemianowicz-Bąk, announced the backing of the State Labour Inspection so that it could control more effectively and, if necessary, order the conversion of B2B contracts into employment contracts. The main criterion is to supply services to only 1 entity, indicating the actual employment relationship.
End of B2B in Poland? Breakthrough IRS decision
Dr. Łukasz Wacławik of the AGH University of discipline and Technology in Krakow, as quoted by “Gazeta Wyborcza”, believes that the evaluation of the KAS may be a breakthrough. B2B contracts are widely utilized in many industries, specified as IT, media or aviation, mainly due to taxation advantages for both employers and employees.
B2B: Benefits and risks
The B2B model allows employers to save money due to the fact that they do not gotta pay ZUS contributions for employees. Employees, on the another hand, benefit from lower taxation rates, specified as 19% linear taxation or a flat rate of 8.5-12%. However, if yearly revenues of PLN 120 1000 were exceeded, the worker on the employment contract would gotta pay 32% of the tax.
Possible consequences for employees
Persons on the JDG (one-person business) providing services to 1 entity may be forced to pay outstanding taxes in accordance with the rules applicable to the employment contract. An employer who will be charged this amount may claim against an employee.
Amendment of the Labour Code
The government is working on a major revision of the Labour Code, which is expected to enter into force since 2026. According to the project, the duration of work will include not only periods of employment on the employment contract, but besides the pursuit of economical activity and implementation of civilian law contracts. The fresh rules aim to close the gap in the pension strategy and facilitate the usage of JDG form for entrepreneurs.
Summary
The latest explanation of KAS and the planned legal changes by the government can importantly affect the labour marketplace in Poland. B2B employees must prepare for changes in their professional and financial situation. It is worth following developments and adapting to fresh regulations to avoid possible taxation and legal problems.
Continued here:
IRS breakthrough: Employees may be in large trouble
