Introduction to detailed report on B2B (business-to-business) contracts in Poland

B2B (business-to-business) contracts are a popular collaboration model in Poland’s IT sector. These arrangements allow companies to access specialized skills without the complexities of traditional employment, while offering contractors greater autonomy and potentially higher net income. However, transitioning employees to a B2B model requires careful planning to ensure legal compliance and minimize risks. This report outlines the legal framework, required tax services in Poland, and best practices for an IT company considering B2B contracts, particularly when converting employees to this structure.

Key issues

Legal and tax needs

Before implementing B2B contracts, it’s critical to consult both a legal advisor and a tax agent in Poland to provide you with professional tax services. B2B contracts are governed by the Civil Code, not the Labor Code, so proper drafting is essential to avoid misclassification. A specialized tax agent in Poland can help ensure all tax implications are correctly handled from the outset.

A robust B2B contract should include:

• Scope of Work: Responsibilities and deliverables
• Compensation: Rates and payment terms
• Duration & Termination: Clear timelines and conditions
• Confidentiality: Data protection clauses
• Intellectual Property: Ownership of work products

To engage in B2B work, individuals must register as a business—either a sole proprietorship (via CEIDG) or a company (via KRS).

Social Security Contributions (ZUS)

Under B2B, contractors handle their own ZUS contributions, which can be optimized using expert tax services in Poland. Unlike employees, B2B contractors can apply for relief schemes like “start-up relief” or reduced ZUS rates for the first 24 months. As a self-employed individual, the contractor is responsible for paying their own social security and health insurance contributions (ZUS). The calculations and advice can be obtained from a tax agent in Poland.

Income Tax

B2B contractors are responsible also for self-assessing their income tax, with options including:

• Under general progressive rates /12% / 32%/  (zasady ogólne), or
• Under the 19% flat tax (podatek liniowy) – note that if the contractor transitions directly from an employment contract with your company to a B2B arrangement, there could be limitations on using the 19% flat tax for the same or similar scope of work as they performed under an employment contract. Tax authorities may scrutinize whether the individual is genuinely self-employed.
• Via a lump-sum scheme (ryczałt) if permissible for the given type of activity. For IT roles, rates of 8.5% or 12%; for other roles, up to 17%. However, the flat-rate tax is unavailable if the contractor provides services to a current or former employer that mirror duties performed under an employment contract in the same or the prior tax year.

• Progressive Tax Rates: 12% or 32%
• Flat Tax: 19% (note restrictions for former employees)
• Lump-Sum Tax (ryczałt): 2%–17%, depending on the activity

Tax agents in Poland can help determine the optimal tax regime and identify any limitations, especially in cases of transition from employment. Contractors can deduct business expenses under most tax regimes. However, lump-sum taxation limits deductions. Using professional tax services in Poland ensures accurate expense handling and tax optimization.

Key Risks and Legal Considerations for B2B contracts

Reclassification Risk

The greatest legal risk is the reclassification of a B2B contract as an employment agreement. If the work resembles that of a traditional employee (fixed hours, direction by employer, same workplace), Polish authorities (including ZUS and tax offices) may intervene. This may lead to back payments of ZUS, taxes, and employee benefits.

A tax agent in Poland can perform a risk analysis as part of tax services to help prevent such reclassification, especially under the proposed “entrepreneur test” by the Ministry of Finance.

Administrative and Legal Challenges

• Administrative Complexity: Managing many contractors can be burdensome.
• Data Protection: Contractors must meet GDPR standards.
• Intellectual Property: Must be clearly outlined in contracts.

Professional tax services in Poland can also assist with contractor payment structures, invoice management, and recordkeeping.

Former Employer Restrictions

Polish tax law restricts access to the 19% flat tax if contractors provide services to a former employer for the same duties within the same or following tax year. A tax agent in Poland should verify eligibility for flat tax status before transitioning.

There are also other restrictions e.g. from ZUS which have to be analysed in a given case.

Maintaining True B2B Nature

Ensure B2B relationships include:

• Autonomy: Contractor chooses how and where to work
• Commercial Risk: Contractors supply their own tools or licenses
• Client Freedom: Contractors should be allowed to serve other clients

These elements help prove genuine self-employment to authorities and reduce reclassification risks.

Best Practices for Implementing a B2B Structure

1. Review Roles and Responsibilities
   • Identify which positions and tasks can feasibly be transferred to a B2B model while preserving genuine self-employment characteristics.
   • Develop clear criteria or a “decision matrix” to determine which roles are best suited to B2B arrangements.
2. Draft a Comprehensive B2B Contract
   • Clearly define the scope of services, deadlines, and responsibilities.
   • Avoid using terms that imply an employment relationship (e.g., “managerial instructions,” “fixed working hours,” “vacation,” etc.).
   • Include clauses on intellectual property rights, confidentiality, non-competition (if needed), and payment terms.
3. Encourage Contractors to Have Other Clients
   • One of the main factors supporting genuine self-employment is the contractor’s ability (and ideally, reality) to serve multiple clients.
   • Even if they currently only work with you, the contract should not prohibit them from acquiring additional clients.
4. Train Management on Managing B2B Contractors
   • Team leaders should be aware of the differences between employees and contractors.
   • For instance, there are no “vacations” or “sick leaves” in a strict B2B sense – instead, you can mutually agree on periods when services are (or are not) provided.
5. Monitor Legislative Changes
   • Polish tax and social security regulations change frequently.
   • Regularly consult with a tax advisor or a tax agent to ensure ongoing compliance and to manage any potential risks proactively. A reliable tax agent in Poland can assist with onboarding, tax registration, tax services and the setup of compliant invoicing and payment processes.

How We Can Support You

Intertax offers a full range of legal and tax services in Poland, including:

• Legal and Tax Consulting, including drafting tailored B2B contract templates;
• Risk Analysis, pointing out factors that might lead to reclassification as employment;
• Guidance for Management, ensuring they understand the nuances of working with B2B contractors;
• On-going Advisory, helping you stay up-to-date with changes in Polish laws and regulations.

In the IT sector, particularly in web-based software development, switching certain roles to B2B is often standard practice and can be beneficial for both parties. However, it’s crucial to structure these relationships correctly to reduce the risk of reclassification and ensure compliance.

We hope you find this information helpful. Please feel free to reach out for further assistance or more detailed insights tailored to your organization’s specific situation.

Useful links:

https://isap.sejm.gov.pl/isap.nsf/download.xsp/WDU19640160093/U/D19640093Lj.pdf

https://www.gov.pl/web/family/basic-information-on-labour-law