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My home country also regulates this scenario - one-man companies with ~single client - for businesses strongly. This is hidden employment. How would it be benef

My home country also regulates this scenario - one-man companies with ~single client - for businesses strongly. This is hidden employment. How would it be beneficial to anyone? - the subcontractor doesn't get any social security. Has to provide everything for himself from the private sector. And pensions (however meager). Theoretically he's free to have multiple clients or vary prices but I guess for most this is a pipe dream and they are dependent. For some tax dodging he gives up the whole legal safety net of being employed. Based on your contract you are freely exchangeable. - the contracting company has more freedoms with getting/tossing employees, although loses a safety net of subcontractor suddenly leaving or changing prices. - the government loses oversight of actual corporate structures. Instead of fixing the flaws in the social system, hidden employment just throws it in the bin because haha less taxes, more money and freedom.

V-2 3y ago
> How would it be beneficial to anyone? Most programmers provide outsourcing services for companies from abroad (including outside of the EU). Low taxes help them - and the umbrella companies AKA software houses - to remain competitive on the global market. So even if they only pay a smaller fraction of their income to the budget, it's still better than if they didn't get the gig to begin with, because the contracts would go elsewhere. > the subcontractor doesn't get any social security. You do get healthcare insurance in Poland; no difference here. You're paying those fees just the same way. You're only required to pay minimum pension charges though, so you have to take care of that yourself. (Objectively speaking, investing your savings in the pension system, of all places, probably isn't an optimal strategy anyway. At any rate, noone stops you from paying more than you're legally required, if you think that it is). > the contracting company has more freedoms with getting/tossing employees, although loses a safety net of subcontractor suddenly leaving or changing prices. It's obviously a trade-off. Being able to let people go without fuss if a customer downscales their budget (I was on the receiving end of this last year) is a competitive advantage. > the government loses oversight of actual corporate structures What do you mean by that?
- poisonborz 3y ago
  My point is that this is a very wrong direction for any country but especially eastern europe. It's like: welfare/health care system is bad, taxes are not used well. Top earning knowledge workers want an exit hatch, let's cater for them and they can hop off the welfare tax system. This way they can also provide cheap prices to foreign companies. So many problems. These are just top off my head: - Countries should want internally organised production, strong companies with own IP, not one-man "companies" producing IP to external entities. - Those foreign companies will switch to other countries with better prices (Asia, Africa) any time if their programming scene improves. It's not like they have stakes like when building a factory. - Lot of people think they can invest better, create a better future pension for themselves. This is often true, and why would we want to allow exits, further eroding the whole system? There should be a base pension fund with everyone involved. > the government loses oversight of actual corporate structures To the government the company could be a 5 person shell, while it actually employs/pays salaries of 100s of families. Theoretically you could roll up the contracts, but that would be very complicated.
  - V-2 3y ago
    > - Countries should want internally organised production, strong companies with own IP, not one-man "companies" producing IP to external entities. Of course it's great to have domestic tech giants (and, sadly, Europe as a whole isn't doing very well in this regard, for reasons that deserve a separate conversation), but these things are largely orthogonal to eachother. There is no reason why a domestic tech giant couldn't have local talents on contracts. Promising domestic start-ups, such as Tidio (mentioning them as they're from my home city) are doing that too. > - Those foreign companies will switch to other countries with better prices (Asia, Africa) any time if their programming scene improves Sure, but having people on employment contracts isn't going to protect you against it. > Lot of people think they can invest better, create a better future pension for themselves. This is often true, and why would we want to allow exits, further eroding the whole system? There should be a base pension fund with everyone involved. And there is. I can't see why preventing people from investing into a better future pension for themselves (on the top of the state-provided minimum) would be a good idea. > To the government the company could be a 5 person shell, while it actually employs/pays salaries of 100s of families. Theoretically you could roll up the contracts, but that would be very complicated. The government has got a centralized system, National System of E-Invoices (or KSeF). It's a fairly fresh thing, but it's becoming obligatory this year. Meaning the taxman gets to see all the invoices without having to jump through any hoops. So even if you are contracting (instead of hiring) a hundred people, it is still transparent.

V-2 3y ago

> How would it be beneficial to anyone? Most programmers provide outsourcing services for companies from abroad (including outside of the EU). Low taxes help them - and the umbrella companies AKA software houses - to remain competitive on the global market. So even if they only pay a smaller fraction of their income to the budget, it's still better than if they didn't get the gig to begin with, because the contracts would go elsewhere. > the subcontractor doesn't get any social security. You do get healthcare insurance in Poland; no difference here. You're paying those fees just the same way. You're only required to pay minimum pension charges though, so you have to take care of that yourself. (Objectively speaking, investing your savings in the pension system, of all places, probably isn't an optimal strategy anyway. At any rate, noone stops you from paying more than you're legally required, if you think that it is). > the contracting company has more freedoms with getting/tossing employees, although loses a safety net of subcontractor suddenly leaving or changing prices. It's obviously a trade-off. Being able to let people go without fuss if a customer downscales their budget (I was on the receiving end of this last year) is a competitive advantage. > the government loses oversight of actual corporate structures What do you mean by that?

poisonborz 3y ago
My point is that this is a very wrong direction for any country but especially eastern europe. It's like: welfare/health care system is bad, taxes are not used well. Top earning knowledge workers want an exit hatch, let's cater for them and they can hop off the welfare tax system. This way they can also provide cheap prices to foreign companies. So many problems. These are just top off my head: - Countries should want internally organised production, strong companies with own IP, not one-man "companies" producing IP to external entities. - Those foreign companies will switch to other countries with better prices (Asia, Africa) any time if their programming scene improves. It's not like they have stakes like when building a factory. - Lot of people think they can invest better, create a better future pension for themselves. This is often true, and why would we want to allow exits, further eroding the whole system? There should be a base pension fund with everyone involved. > the government loses oversight of actual corporate structures To the government the company could be a 5 person shell, while it actually employs/pays salaries of 100s of families. Theoretically you could roll up the contracts, but that would be very complicated.
- V-2 3y ago
  > - Countries should want internally organised production, strong companies with own IP, not one-man "companies" producing IP to external entities. Of course it's great to have domestic tech giants (and, sadly, Europe as a whole isn't doing very well in this regard, for reasons that deserve a separate conversation), but these things are largely orthogonal to eachother. There is no reason why a domestic tech giant couldn't have local talents on contracts. Promising domestic start-ups, such as Tidio (mentioning them as they're from my home city) are doing that too. > - Those foreign companies will switch to other countries with better prices (Asia, Africa) any time if their programming scene improves Sure, but having people on employment contracts isn't going to protect you against it. > Lot of people think they can invest better, create a better future pension for themselves. This is often true, and why would we want to allow exits, further eroding the whole system? There should be a base pension fund with everyone involved. And there is. I can't see why preventing people from investing into a better future pension for themselves (on the top of the state-provided minimum) would be a good idea. > To the government the company could be a 5 person shell, while it actually employs/pays salaries of 100s of families. Theoretically you could roll up the contracts, but that would be very complicated. The government has got a centralized system, National System of E-Invoices (or KSeF). It's a fairly fresh thing, but it's becoming obligatory this year. Meaning the taxman gets to see all the invoices without having to jump through any hoops. So even if you are contracting (instead of hiring) a hundred people, it is still transparent.