Setting up Shop in Poland - Taxation Thread poster: Thomas Prager
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Hi,
first of all, apologies for posting in English, but my Polish is still rather poor at this stage. I'm currently setting up shop as a translator and copywriter in Poznań, Poland. I mainly find clients through copywriter portals and translation job sites such as Proz.com. However, now I seem to be encountering a sort of Catch-22. From what my tax advisor told me, I need to have contracts with my clients if I want to set up a działalność gospodarcza, which is not really possibl... See more Hi,
first of all, apologies for posting in English, but my Polish is still rather poor at this stage. I'm currently setting up shop as a translator and copywriter in Poznań, Poland. I mainly find clients through copywriter portals and translation job sites such as Proz.com. However, now I seem to be encountering a sort of Catch-22. From what my tax advisor told me, I need to have contracts with my clients if I want to set up a działalność gospodarcza, which is not really possible, since I work very much ad-hoc and there are only agreements with clients by email. So according to my tax advisor, the only way of doing business is as osoba fizyczna, but here the tax office may come to the conclusion that given the volume of work I'm doing, I'm liable to registering a business. So I'm wondering how other folks that are in the same boat have resolved this issue?
Thanks for your input!
Thomas ▲ Collapse
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Adam Podstawczynski (X) 
Local time: 22:29
Polish to English
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Thomas,
For any Polish citizen the following is not true:
"I need to have contracts with my clients if I want to set up a działalność gospodarcza".
And I don't suppose there is such a requirement for foreigners. We are in the EU, and while some paperwork may be different for you, the basic rights -- the right to set up business (pol: działalność gospodarcza) -- should be the same for you as they are for me.
No contracts are required to st... See more Thomas,
For any Polish citizen the following is not true:
"I need to have contracts with my clients if I want to set up a działalność gospodarcza".
And I don't suppose there is such a requirement for foreigners. We are in the EU, and while some paperwork may be different for you, the basic rights -- the right to set up business (pol: działalność gospodarcza) -- should be the same for you as they are for me.
No contracts are required to start działalność gospodarcza in Poland. You need to register your business in 3 different offices and fill in longish forms (in particular at GUS office), but that's all there is to it.
Check again.
Adam ▲ Collapse
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| 1 form, 1 office | Sep 8, 2013 |
Adam Podstawczynski wrote:
No contracts are required to start działalność gospodarcza in Poland. You need to register your business in 3 different offices and fill in longish forms (in particular at GUS office), but that's all there is to it.
Luckily, that is not true for a few years. Now there is only one form to be filled and one office to be visited. And you can even do it online (but still one visit will be required to authorize it).
And change your advisor - you don't need any contracts to register.
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Thomas Prager
Poland
Local time: 22:29
English to German
TOPIC STARTER | Running a działalność gospodarcza without contracts? | Sep 8, 2013 |
Thanks Arkadiusz and Adam. Perhaps I expressed myself somewhat imprecisely in my initial post. Let me rephrase what the problem is. The issue is less with filling in the forms and starting the company and more with actually working for and invoicing clients. This is copied from an email from my tax advisor:
"Osoba prowadzaca dzialalnosc w Polsce , zawiera kontrakt a po zakonczeniu pracy wystawia fakture vat uzywajac numerow NIP."
So the way I understand this is that in ... See more Thanks Arkadiusz and Adam. Perhaps I expressed myself somewhat imprecisely in my initial post. Let me rephrase what the problem is. The issue is less with filling in the forms and starting the company and more with actually working for and invoicing clients. This is copied from an email from my tax advisor:
"Osoba prowadzaca dzialalnosc w Polsce , zawiera kontrakt a po zakonczeniu pracy wystawia fakture vat uzywajac numerow NIP."
So the way I understand this is that in order to run a działalność gospodarcza, I need to get my clients to sign contracts first, before I can work for them and invoice them. However, I don't see that given the ad-hoc nature of my work how I can get each and every client to sign a contract first. Perhaps someone on this forum who is working on the basis of działalność gospodarcza can describe how he or she is dealing with this requirement?
Thanks a lot,
Thomas ▲ Collapse
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| It is contract OR company | Sep 8, 2013 |
Thomas Prager wrote:
So the way I understand this is that in order to run a działalność gospodarcza, I need to get my clients to sign contracts first, before I can work for them and invoice them. However, I don't see that given the ad-hoc nature of my work how I can get each and every client to sign a contract first. Perhaps someone on this forum who is working on the basis of działalność gospodarcza can describe how he or she is dealing with this requirement?
Thomas
No contracts are required. I have działalność gospodarcza and this the first time I even hear about any contracts that need to be signed. You just invoice your customers and that is all.
Maybe you (or your advisor) are mixing two ways of conducting translation business in Poland - you could do it either on basis of "umowa o dzieło" - which is contract for translation (or any other work) and does not require registration of company (ie. "działalność gospodarcza") OR register "działalność gospodarcza" and invoice your customers (without contracts).
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Arkadiusz Dymek wrote: Thomas Prager wrote:
So the way I understand this is that in order to run a działalność gospodarcza, I need to get my clients to sign contracts first, before I can work for them and invoice them. However, I don't see that given the ad-hoc nature of my work how I can get each and every client to sign a contract first. Perhaps someone on this forum who is working on the basis of działalność gospodarcza can describe how he or she is dealing with this requirement?
Thomas No contracts are required. I have działalność gospodarcza and this the first time I even hear about any contracts that need to be signed. You just invoice your customers and that is all. Maybe you (or your advisor) are mixing two ways of conducting translation business in Poland - you could do it either on basis of "umowa o dzieło" - which is contract for translation (or any other work) and does not require registration of company (ie. "działalność gospodarcza") OR register "działalność gospodarcza" and invoice your customers (without contracts).
However, you all guys do register "działalność gospodarcza", as far as I know...
Therefore, it should have some benefits as compared to working on the basis of "umowa o dzieło"?
Could you please briefly explain the benefits?
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Maciej W
Poland
Local time: 22:29
English to Polish
+ ...
Two additional points:
- yes, you can invoice a customer without signing anything in advance - your agreement can take any form you see fit (oral, email, ...);
- but in fact, many translators/agencies prefer to sign agreements with their customers, to specify all their terms and conditions, like general rules for deadlines, the scope of service, rates and charges, quality requirements etc. It might come in handy when, say, your client decides not to pay you for your work, or you see ... See more Two additional points:
- yes, you can invoice a customer without signing anything in advance - your agreement can take any form you see fit (oral, email, ...);
- but in fact, many translators/agencies prefer to sign agreements with their customers, to specify all their terms and conditions, like general rules for deadlines, the scope of service, rates and charges, quality requirements etc. It might come in handy when, say, your client decides not to pay you for your work, or you see you can't deliver a quality translation because of poor source material, and so on. ▲ Collapse
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Nein, Thomas, Du gehst zur nächsten Stadtverwaltung, Abteilung Wirtschaftsförderung oder
Gewerbeanmeldung und meldest das an einem Schalter an, die leiten das an das Finanzamt, die Sozialversicherung und das Statistikamt weiter. Dann kannst Du anfangen und Deinen Kunden Rechnungen schreiben, ohne einen Vertrag abzuschließen (weder umowa o dzieło noch umowa zlecenia, weil das für Leute ohne Gewerbeschein ist). Wenn Du nicht mehr als 150.000 PLN Umsatz im Jahr machst und nicht freiwilli... See more Nein, Thomas, Du gehst zur nächsten Stadtverwaltung, Abteilung Wirtschaftsförderung oder
Gewerbeanmeldung und meldest das an einem Schalter an, die leiten das an das Finanzamt, die Sozialversicherung und das Statistikamt weiter. Dann kannst Du anfangen und Deinen Kunden Rechnungen schreiben, ohne einen Vertrag abzuschließen (weder umowa o dzieło noch umowa zlecenia, weil das für Leute ohne Gewerbeschein ist). Wenn Du nicht mehr als 150.000 PLN Umsatz im Jahr machst und nicht freiwillig für die Umsatzsteuer optierst, bleibst Du erst mal Kleinunternehmer und stellst "rachunek bez VAT" aus.
Und such Dir einen vernünftigen Steuerberater. Am einfachsten für Freelancer ist für den Anfang
księga przychodów i rozchodów, Einnahmen-Überschussrechnung, da kannst Du viele Deiner Kosten geltend machen und zahlst sehr lange keine Einkommensteuer.
Viel Erfolg! ▲ Collapse
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Thomas Prager
Poland
Local time: 22:29
English to German
TOPIC STARTER | Thanks everyone! | Sep 8, 2013 |
Thanks everyone for your replies - this is really, really helpful. It looks like I was misinformed by my tax advisor regarding the contract requirement. I will definitely set up a działalność gospodarcza now and then start invoicing. Dziękuję bardzo!
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| Yes, the accountant is right | Sep 9, 2013 |
Thomas Prager wrote:
Hi,
first of all, apologies for posting in English, but my Polish is still rather poor at this stage. I'm currently setting up shop as a translator and copywriter in Poznań, Poland. I mainly find clients through copywriter portals and translation job sites such as Proz.com. However, now I seem to be encountering a sort of Catch-22. From what my tax advisor told me, I need to have contracts with my clients if I want to set up a działalność gospodarcza, which is not really possible, since I work very much ad-hoc and there are only agreements with clients by email. So according to my tax advisor, the only way of doing business is as osoba fizyczna, but here the tax office may come to the conclusion that given the volume of work I'm doing, I'm liable to registering a business. So I'm wondering how other folks that are in the same boat have resolved this issue?
Thanks for your input!
Thomas
Yes, Thomas, the accountant is right, and the system truckly is f-ed up like that.
For the record, 'osoba fizyczna' is simply an individual ('natural person' in legal parlance). If you register a business to become a sole proprietor, you're still an individual; in Polish, that's called, 'osoba fizyczna prowadząca działalność gospodarczą.' What your accountant is referring to is colloquially called 'działalność osobista', although in a translator's case it has more to do with not working for other natural persons but only for businesses than with whatever the original concept of 'działalność osobista' is really supposed to mean.
You can work under contracts of comission and work for fire ('umowa zlecenia' and 'umowa o dzieło' respectively), as long as you work only for translation agencies and perhaps direct clients who are companies, and that is no longer persecuted prosecuted by tax authorities, but – theoretically – the infamous catch 22 loop can still be applied due to the bad drafting of the references within the PIT Act, which have not been remedied for what's probably over a decade despite criticism from the academia.
Tax laws aren't rational here, unfortunately. The first and foremost problem is that the system is notoriously dumb, followed by its inclination to 1) see taxpayers as criminals in terms of attitude, 2) make taxpayers into criminals with its definitions. Then, there's the prejudice against entrepreneurship and the fact that laws aren't exactly written by entrepreneurial people in Parliament. It sucks, I know. It's got me to the point of tears many times over more than a decade.
Thomas Prager wrote:
Thanks everyone for your replies - this is really, really helpful. It looks like I was misinformed by my tax advisor regarding the contract requirement. I will definitely set up a działalność gospodarcza now and then start invoicing. Dziękuję bardzo!
What your tax advisor meant is that:
1. The law requires that you register a business if you want to serve your clients on a permanent and organised basis (as the PIT Act terms it).
2. At the same time, if you register a business, you become obliged to pay social insurance contributions every month regardless of your income. Initially, you can pay them at a reduced rate: in 2013, that's ~PLN 415 instead of ~PLN 1027. Ergo, you need to have a solid stream of work even from day 1 to make your business pay your bills.
The f-ed system knows no middle way. The current ersatz solution consists in not harrassing those people who choose to work under contracts of commission or contracts of hire for other businesses. That's a practical convention, though, there's nothing really formal about it, and a strict interpretation of the law will make such people criminals when prosecuted with sufficient energy and malevolence.
Also, when your good bookie said, 'you need contracts,' he or she probably probably meant that you need to have some work contracted to you by some clients, rather than any specific type of contract. The bookie definitely did not mean to say that you need to sign voluminous written contracts as a sole proprietor, that'd be a typical clouded understanding by a layman.
[Edited at 2013-09-09 12:19 GMT]
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