4 ms·

This would be quite risky where I am from, for both the freelancer and the employer. Being self employed, but only for a single customer, is false self-employme

by lqet 3y ago

This would be quite risky where I am from, for both the freelancer and the employer. Being self employed, but only for a single customer, is false self-employment. If you get caught, your employer has to pay taxes and social security contributions retroactively for up to 4 years, and afaik both the employer and the freelancer are liable for the money owed to the tax office and social securities. If you are caught doing this premeditated, it might be a criminal offence.

knallfrosch 3y ago
If you're from a country like Germany, most of what you're skipping financially is the insurance cost that's covered by the employer (social security etc.) Which means you don't have access to the social safety in case you need it.
- KptMarchewa 3y ago
  If you earn enough, the savings can easily surpass the risk for a singular person. It's worse for society overall, but let's not pretend the high earners don't mostly subsidize the safety net.
  - V-2 3y ago
    The IT sector in Poland (again) is a booming one, and most of the services are effectively exported, as we're talking outsourcing. I guess it translates into the lack of political will to curb the practice, too, as the government would risk that self-employed programmers (and whatnot) may not fall in line, but mostly log out of the system instead, registering their companies abroad, for example. I guess the government isn't eager to start this cat-and-mouse game, preferring a smaller slice of a bigger pie. There are even some extra incentives on the top of the flat income tax rate (which is an option for all one-man companies, regardless of the sector)... Like the "IP Box" tax relief, which drives the income tax rate from the regular 19% all the way down to 5%, as long as you get your services classified as "research and development". It takes some patience and loads of legal paperwork, which you obviously have to pay for (the latter, that is), but it's well worth it in the end.
    - KptMarchewa 3y ago
      >registering their companies abroad, for example. "Registering" the business only is a trap and a way to pay much much more _when_ the tax office decides you are avoiding taxes. To truly do that, you need to move your center of life abroad, which generally means being outside Poland for 183 days a year. >I guess the government isn't eager to start this cat-and-mouse game, preferring a smaller slice of a bigger pie. I agree that it mostly is the case, as I still pay few times more taxes (and VAT on consumption...) than average citizen, even when using 12% lump sum tax.
      - V-2 3y ago
        > To truly do that, you need to move your center of life abroad, which generally means being outside Poland for 183 days a year. Yeah, theoretically. But at least within the Schengen area, that's pretty difficult to prove/disprove, especially if you've got no family. I'm working remotely, I'm renting a cheap room in Budějovice, here's the tenancy agreement. Come see if my toothbrush is wet :)
    - lifestyleguru 3y ago
      In developed countries IP means submitting patents and real research which build the company's position on the market. That's why they have strong companies and brands. The Polish "IP box" is creating and submitting PDFs with git diffs of Java and TypeScript written for these companies. Just remember to remove passwords and secrets from them, guys.
      - V-2 3y ago
        Not all intellectual property is patented. Anyhow, you don't include git diffs. You cannot, even if you wanted to - the code is not your property. The whole point is that you're selling your intellectual property rights. It also means that the tax office pretty much has to rely on your word that the work is innovative in nature. Obviously they'd be in no position to tell the difference anyway.
- atraac 3y ago
  In Poland(since I'm also from here), biggest chunk of savings when working as self-employed is income tax and mandatory public retiremend fund. Most Software Engineers go B2B/self-employment route because not only taxes are lower, but savings from paying minimal public retirement are pretty big with higher salaries. We're at a point where most people in Poland do not believe in retirement system anymore, it's unsustainable and will crash or will be kept with social, minimal retirement, no matter what you paid in. That's why most of us want to save on the side, put that into ETFs or housing rather than count on the government, especially that over last decade or so almost destroyed this country.
  - KptMarchewa 3y ago
    Exactly. Only 3% of millennials believe that state pension system will allow them to survive. https://forsal.pl/artykuly/1415939,srokowski-tylko-3-proc-milenialsow-wierzy-w-panstwowa-emeryture-czy-przekonaja-sie-do-ppk.html https://forsal.pl/artykuly/1415939,srokowski-tylko-3-proc-mi...
V-2 3y ago
This risk does exist in Poland, but among the criteria for "false self-employment" is being expected to work within fixed hours, and in a location specified by the employer. As IT workers - even those who've got contracts of employment - typically do flexible hours, and pretty often work from home (or otherwise remotely), it doesn't really apply.
lifestyleguru 3y ago
> Being self employed, but only for a single customer, is false self-employment This is exactly what happens in Poland and everyone involved feels very smart for cheating the system. That's also why software from Poland is such a tacky crap despite so many "talents". The software professionals have no leverage to push back, they only can walk away. The irresistibile benefit is that one can write off buying a car into operating costs, so the dream of PREMIUM GERMAN CAR prevails over doing anything creative.
- V-2 3y ago
  > That's also why software from Poland is such a tacky crap despite so many "talents" [citation needed] How do you recognize "software from Poland" anyway?
  - lifestyleguru 3y ago
    > How do you recognize "software from Poland" anyway? Whatever is created in all these nearshoring and outsourcing centers in Warsaw, Kraków, and Wrocław. Currently mostly Azure, SAP, business Java and Angular.
    - V-2 3y ago
      Yeah, but how do you know which application was and which wasn't? Apart from some big customers, it usually isn't public knowledge. Eg. my previous project was a banking app for a rich Middle Eastern country. There's no "acknowledgements" section in the app. My original question still stands - by what metrics do you regard "software from Poland" as "tacky crap"? I'm not being belligerent about it, but somewhat curious, sure.
      - lifestyleguru 3y ago
        Ain't gonna fight. Good luck.
        V-2 3y ago
mkaszkowiak 3y ago
Similiar laws are in Poland, except they're not really enforced. It's really rare that the tax office would prove a company exists solely for tax optimization. The risk virtually drops to zero if one freelances after the hours and has legitimate invoices with other companies. This often causes mismatch between Polish employees who wish to work remotely abroad, and for ex. employeers from the DACH region, where I've heard the laws are strictly enforced. One party claims there is no risk, and the other claims it's too risky :-) (taking other factors aside, such as employee protection, etc.)
strobe 3y ago
sure that the case in lot of countries but is something really wrong with idea to have 2+ clients as minimum because reason why work done in that way is because person doing it don't wanna agree on terms that 'employment' contract is required and if that 'single' client is gone he always can get another one in few months. Sometimes you work with few clients in single year but sometimes it just one for 2-3y. And worth part that in some places taxes on self-employment might be higher.

by lqet 3y ago

knallfrosch 3y ago

If you're from a country like Germany, most of what you're skipping financially is the insurance cost that's covered by the employer (social security etc.) Which means you don't have access to the social safety in case you need it.

KptMarchewa 3y ago
If you earn enough, the savings can easily surpass the risk for a singular person. It's worse for society overall, but let's not pretend the high earners don't mostly subsidize the safety net.
- V-2 3y ago
  The IT sector in Poland (again) is a booming one, and most of the services are effectively exported, as we're talking outsourcing. I guess it translates into the lack of political will to curb the practice, too, as the government would risk that self-employed programmers (and whatnot) may not fall in line, but mostly log out of the system instead, registering their companies abroad, for example. I guess the government isn't eager to start this cat-and-mouse game, preferring a smaller slice of a bigger pie. There are even some extra incentives on the top of the flat income tax rate (which is an option for all one-man companies, regardless of the sector)... Like the "IP Box" tax relief, which drives the income tax rate from the regular 19% all the way down to 5%, as long as you get your services classified as "research and development". It takes some patience and loads of legal paperwork, which you obviously have to pay for (the latter, that is), but it's well worth it in the end.
  - KptMarchewa 3y ago
    >registering their companies abroad, for example. "Registering" the business only is a trap and a way to pay much much more _when_ the tax office decides you are avoiding taxes. To truly do that, you need to move your center of life abroad, which generally means being outside Poland for 183 days a year. >I guess the government isn't eager to start this cat-and-mouse game, preferring a smaller slice of a bigger pie. I agree that it mostly is the case, as I still pay few times more taxes (and VAT on consumption...) than average citizen, even when using 12% lump sum tax.
    - V-2 3y ago
      > To truly do that, you need to move your center of life abroad, which generally means being outside Poland for 183 days a year. Yeah, theoretically. But at least within the Schengen area, that's pretty difficult to prove/disprove, especially if you've got no family. I'm working remotely, I'm renting a cheap room in Budějovice, here's the tenancy agreement. Come see if my toothbrush is wet :)
  - lifestyleguru 3y ago
    In developed countries IP means submitting patents and real research which build the company's position on the market. That's why they have strong companies and brands. The Polish "IP box" is creating and submitting PDFs with git diffs of Java and TypeScript written for these companies. Just remember to remove passwords and secrets from them, guys.
    - V-2 3y ago
      Not all intellectual property is patented. Anyhow, you don't include git diffs. You cannot, even if you wanted to - the code is not your property. The whole point is that you're selling your intellectual property rights. It also means that the tax office pretty much has to rely on your word that the work is innovative in nature. Obviously they'd be in no position to tell the difference anyway.
atraac 3y ago
In Poland(since I'm also from here), biggest chunk of savings when working as self-employed is income tax and mandatory public retiremend fund. Most Software Engineers go B2B/self-employment route because not only taxes are lower, but savings from paying minimal public retirement are pretty big with higher salaries. We're at a point where most people in Poland do not believe in retirement system anymore, it's unsustainable and will crash or will be kept with social, minimal retirement, no matter what you paid in. That's why most of us want to save on the side, put that into ETFs or housing rather than count on the government, especially that over last decade or so almost destroyed this country.
- KptMarchewa 3y ago
  Exactly. Only 3% of millennials believe that state pension system will allow them to survive. https://forsal.pl/artykuly/1415939,srokowski-tylko-3-proc-milenialsow-wierzy-w-panstwowa-emeryture-czy-przekonaja-sie-do-ppk.html https://forsal.pl/artykuly/1415939,srokowski-tylko-3-proc-mi...

V-2 3y ago

This risk does exist in Poland, but among the criteria for "false self-employment" is being expected to work within fixed hours, and in a location specified by the employer. As IT workers - even those who've got contracts of employment - typically do flexible hours, and pretty often work from home (or otherwise remotely), it doesn't really apply.

lifestyleguru 3y ago

> Being self employed, but only for a single customer, is false self-employment This is exactly what happens in Poland and everyone involved feels very smart for cheating the system. That's also why software from Poland is such a tacky crap despite so many "talents". The software professionals have no leverage to push back, they only can walk away. The irresistibile benefit is that one can write off buying a car into operating costs, so the dream of PREMIUM GERMAN CAR prevails over doing anything creative.

V-2 3y ago
> That's also why software from Poland is such a tacky crap despite so many "talents" [citation needed] How do you recognize "software from Poland" anyway?
- lifestyleguru 3y ago
  > How do you recognize "software from Poland" anyway? Whatever is created in all these nearshoring and outsourcing centers in Warsaw, Kraków, and Wrocław. Currently mostly Azure, SAP, business Java and Angular.
  - V-2 3y ago
    Yeah, but how do you know which application was and which wasn't? Apart from some big customers, it usually isn't public knowledge. Eg. my previous project was a banking app for a rich Middle Eastern country. There's no "acknowledgements" section in the app. My original question still stands - by what metrics do you regard "software from Poland" as "tacky crap"? I'm not being belligerent about it, but somewhat curious, sure.
    - lifestyleguru 3y ago
      Ain't gonna fight. Good luck.
      - V-2 3y ago

mkaszkowiak 3y ago

Similiar laws are in Poland, except they're not really enforced. It's really rare that the tax office would prove a company exists solely for tax optimization. The risk virtually drops to zero if one freelances after the hours and has legitimate invoices with other companies. This often causes mismatch between Polish employees who wish to work remotely abroad, and for ex. employeers from the DACH region, where I've heard the laws are strictly enforced. One party claims there is no risk, and the other claims it's too risky :-) (taking other factors aside, such as employee protection, etc.)

strobe 3y ago

sure that the case in lot of countries but is something really wrong with idea to have 2+ clients as minimum because reason why work done in that way is because person doing it don't wanna agree on terms that 'employment' contract is required and if that 'single' client is gone he always can get another one in few months. Sometimes you work with few clients in single year but sometimes it just one for 2-3y. And worth part that in some places taxes on self-employment might be higher.