Starting from January 2021, under the new regulations, contribution remitters, including natural persons, acting as contracting parties will be required to notify the Polish Social Security Administration of "each contract for specific task concluded, provided that it is entered into with a person who is not their employee or that it is not concluded for performance of work for the employer, by whom they are employed".
The many amendments brought to the Polish legislation in 2020 to respond to the challenges caused by the global COVID-19 pandemic includes modifications implemented by way of Article 22 of the Act of 31 March 2020 amending the Act on Special Arrangements for the Prevention, Control and Management of COVID‑19, Other Infectious Diseases and the Resulting Emergencies, and Certain Other Acts (hereinafter: the COVID-19 Act) into the Act of 13 October 1998 on the Social Insurance System (Journal of Laws of 2020, item 266), which imposed on economic operators the requirement of notifying the concluded specific task contracts to the Polish Social Security Administration (ZUS).
At present, specific task contracts are not entered on the list of contracts concluded by individuals in the territory of the Republic of Poland subject to compulsory pension and disability insurance, provided for by Article 6 of the Act on the Social Insurance System, except for specific task contracts concluded between the employer and the employee. Contracts of such kinds are covered by compulsory pension and disability insurance, under Article 9(4b) of the Act on the Social Insurance System. Additionally, pursuant to Article 8(2a) thereof, an individual entering into such contract shall be treated as an employee.
Thus, the remitter is released from the obligation to collect contributions for pension and disability insurance on the concluded specific task contracts. However, starting from January 2021, under the new regulations, contribution remitters, including natural persons, acting as contracting parties will be required to notify the Polish Social Security Administration of "each contract for specific task concluded, provided that it is entered into with a person who is not their employee or that it is not concluded for performance of work for the employer, by whom they are employed". The new obligation was introduced to Article 36(17) of the Act on the Social Insurance system by way of Article 22 of the COVID-19 Act. Both the remitter and the natural person have to fulfil it within 7 days from the date of concluding the contract.
Based on the information provided, the Polish Social Security Administration will keep records of all the specific task contracts concluded, the list of which will then be available on the contribution remitter's account.
Furthermore, pursuant to Article 50(17)(5) introduced to the Act on the Social Insurance System, ZUS shall "provide the Minister competent for public finance and the bodies of the National Revenue Administration, upon their request, with the following data: [...] concerning contracts for specific task referred to in Article 36(17)".
Information must be provided via ZUS RUD form, which shall be filed by the remitter or the natural person for each specific task contract entered into, within 7 days from its conclusion.
In summary, the new regulation does not seem to bring any serious consequences, except for the additional reporting obligation imposed on remitters and natural persons. It should be noted, however, that pursuant to article 68 of the Act on the Social Insurance System, the Polish Social Security Administration is authorized to inspect whether the parties should be subject to insurance, as well as to challenge the contracts concluded by the parties. In fact, during ZUS inspections, contracts for specific task concluded by the parties may be reclassified as, for example, contracts of mandate,
which, in turn, are covered by compulsory pension and disability insurance. At present, under Article 9(2c) on the Act on the Social Insurance System, a person who entered a contract of mandate for an amount higher or equal to the minimum wage (i.e. PLN 2,600 for 2020) is not subject to pension and disability insurance for other reasons. Pension and disability insurance contributions are due on the amount up to the minimum wage.
Additionally, it should be emphasized that pursuant to Article 66(1)(e) of the Act of 27 August 2004 on Publicly Funded Healthcare Services (Journal of Laws of 2020, item 1398), signing a contract of mandate results in compulsory health insurance coverage.
The Polish Civil Code defines specific task contract as a contract of result, where the contractor assumes an obligation to achieve an individually specified outcome defined by the object of the contract. In turn, the contract of mandate is described as agreement of best effort. Based on the information on the concluded contracts for specific task and other evidence obtained, ZUS has the right to inspect the said contracts. Subsequently, the contracts concluded by the parties may be challenged and reclassified as contracts of mandate.
As a result, ZUS may order the remitter to pay the entirety of the contributions due under the challenged contract, together with interest for late payment, and charge an additional fine. This means that the newly introduced obligation of reporting specific task contracts, despite having no direct impact on social security settlements, may significantly influence the remitter's obligations and the net amount of the party's remuneration.
In fact, according to the media, works are underway to amend the regulation limiting the social contribution assessment basis under mandate contracts, pursuant to which all revenue earned by the insured would be subject to compulsory pension and disability insurance, regardless of the concurrence of insurance titles, which is now governed by Article9(2c) of the Act on the Social Insurance System.
Author: Jakub Pankowiec, Senior Consultant, Tax, Global Mobility Services, KPMG in Poland