Invoicing platforms present themselves as a convenient solution for freelancers. However, as Tomasz Prokurat, a legal advisor and partner at the Litigato law firm, explains, the problem is that formally it is the platform that concludes the contract with the freelancer and issues an invoice to the end client, although in fact the service is performed by the freelancer directly for the client.
The legal advisor gives an example from his own experience. When planning to commission social media management, the law firm agreed the details directly with the freelancer. Unexpectedly, she received an email from the platform asking for payment.
— We received a message from an entity we do not know, informing us that they thank us for using their services. We didn't even know that the freelancer worked through the platform, he reports. Ultimately, they refused to accept the invoice and entered into a direct contract with the freelancer. This shows how easy it is to misunderstand.
Read also: Remote work on your own terms. The 28-year-old works 15-30 hours a week and travels around the world
The model is not illegal, but it can cause problems
Formally, the platform acts as an intermediary – it orders a service from a freelancer and “resells” it to the client. — It is difficult to answer unequivocally whether such a model is legal and tax-safe. From the formal side, the platform acts as an intermediary between a freelancer providing a specific service and a client who is interested in receiving such a service. It outsources the service to a freelancer and then resells the service to the client. There is no legal provision prohibiting this type of activity and from this perspective it is difficult to question it. – explains Marcin Cetnarowicz, partner and leader of the labor law practice at the SSW law firm.
However, the expert adds that the problem begins with the actual provision of the service. — The service is de facto provided by the freelancer to the client, not by the platform. The model does not reflect an actual economic event and in practice may lead to disputes with tax authorities and ZUS. Such action may be considered as issuing an “empty invoice”.
Read also: Over 600 thousand companies may not pay ZUS this year. How to take advantage of the relief?
A blank invoice is a document that does not reflect an actual business transaction. According to court jurisprudence, an empty invoice occurs in two situations: when no transaction took place at all, or when the transaction took place, but with the participation of an entity other than the invoice issuer. In the case of platforms, the problem is precisely the latter – the service is actually performed by a freelancer, but the invoice is issued by the platform.
The risk for the client and the contractor is serious
Marcin Cetnarowicz explains that freelancers who regularly use platforms and have a significant source of income from this are exposed to the risk of inspection to check whether their activity does not constitute de facto business activity. This may mean an avalanche of consequences – tax, contribution and even criminal.
— There are also consequences for the client accepting the invoice. In practice, such an invoice may be excluded from tax-deductible costs (increasing the tax base), with the loss of the right to deduct VAT charged on such an invoice. Depending on the case, criminal and fiscal penal liability may also come into play, adds Marcin Cetnarowicz.
The penalty for issuing and accepting empty invoices ranges from six months to eight years of imprisonment. With a value exceeding PLN 10 million – up to 25 years in prison. The Fiscal Penal Code additionally provides for a fine of up to 720 daily rates.
Read also: The KSeF revolution and VAT fraud. Why taxpayers need to be even more careful
Therefore, Marcin Cetnarowicz advises clients accepting invoices to always have the so-called “defense file”. This is a set of documents confirming that the invoice documents the economic event correctly and reliably. — Agreement, evidence of service provision and correspondence – always in relation to the platform, with limited contact with the freelancer – emphasizes the expert
PIP reform. Additional threat
Planned changes in the competences of the National Labor Inspectorate may further complicate the situation. Inspectors are to be given the right to reclassify civil law contracts into employment contracts by an administrative decision, under pain of immediate enforceability.
— In the case of a freelancer who happens to perform this task in the client's office, during regular hours, and on the equipment, the inspector may establish an employment relationship between him and the end client, disregarding contracts with the platform – explains Tomasz Prokurat.
The safest options remain to conclude direct contracts with contractors – orders or works for smaller projects – and register a business activity for larger-scale cooperation.
— At SSW, we are supporters of innovative solutions. As part of our practice, we often evaluate various solutions and advise on structuring them so that they can function in accordance with the law. However, it must be admitted that there are cases when the law simply does not keep up with the expectations and needs of the market – summarizes Marcin Cetnarowicz.
