A Draft Bill relating to the National Labour Inspectorate has recently been announced. One of the main areas impacted by the new provisions, will be the competences of the National Labour Inspectorate which are to be significantly strengthened.
The National Labour Inspectorate will be able to issue administrative decisions reclassifying the incorrectly concluded civil law contracts / B2B into employment contracts. The new rules will also cover contracts signed before the changes take effect.
It is also planned to launch a dedicated data exchange channel between the National Labour Inspectorate, the Social Insurance Institution and the National Revenue Administration.
The National Labour Inspectorate (PIP) will be equipped with new powers and competences.
Civil law contracts / B2B are very popular in Poland due to their flexibility and fiscal efficiency, for example in the IT sector, consulting, business services, accommodation and food services, freelancers etc.
The National Labour Inspectorate will now have the right to issue administrative decisions transforming incorrectly concluded civil law contracts / B2B into employment contracts. The new rules will also cover contracts signed before the changes take effect.
The National Labour Inspectorate will also be allowed to carry out remote inspections. The maximum value of penalties imposed in penalty proceedings is to be increased.
Moreover, in order to improve cooperation between individual institutions, Poland plans to launch a special data exchange channel between the National Labour Inspectorate, the Social Insurance Institution and the National Revenue Administration.
The effective reclassification of such contracts into employment contracts will have serious consequences in terms of labour law requirements, taxes (incl. Personal Income Tax, VAT), social and health insurance contributions, as well as the necessity of making retroactive adjustments.
In addition, it should be noted that the consequences of the reclassification of a B2B contract into employment relationship may have serious implications in the case of foreign workers,, as the lack of a required work permit may result in the work being deemed illegal, which could affect their ability to remain in Poland , and could lead to administrative penalties or even a ban on entry.
It should be emphasised that this is currently only a Draft Bill, and the final provisions of law will be known after the parliamentary process is completed.
If you engage with individuals under service contracts (B2B), contracts for personal services or contracts for specific work, it is worth considering a review of these contracts and your foreign worker population, to prepare for planned changes in legislation.
We can assist to analyse your existing engagement models based on civil law contracts / B2B in order to verify their correctness and prepare for planned changes in legislation.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Jadwiga Chorązka
Partner, Tax Advisor
Joanna Narkiewicz-Tarłowska
Managing Director, Tax Advisor
Emilia Piechota
Managing Director
Grzegorz Ogórek
Director
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