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Need advice preparing invoice for my employer - B2B contract


GaryB
4 Aug 2019 #1
Hi,

Hoping to get some quick advice and answers.

I recently applied for a new IT position in Warsaw, Poland. I opted for b2b type contract and advised my monthly base rate as 8,600 zl netto.

They have accepted my offer which is good.

Apparently I have to give them an invoice each before I can get paid. That means I need to factor in the extra costs and obligations to make sure I get the correct net amount.

I am guessing the total gross amount to invoice my employer is somewhere in the order of 13,000 zl per month (estimate of gross total for my base, income tax, insurance and VAT).

I would be grateful if someone can break this down for me or show me where I can get the exact figures.

Thank you so much.
delphiandomine 83 | 17,771
4 Aug 2019 #2
Unfortunately, you've screwed yourself over quite badly. In a B2B contract, 8,600 netto is understood as 8600PLN+23% VAT. There's no allowance for insurance, income tax or other deductions - you're expected to cover those from the net amount.
OP GaryB
4 Aug 2019 #3
Thank you for your reply. I made it clear to them that I wanted this base amount after tax etc. That is why I quoted netto because I did not know what my obligations were going to be. The tricky part is making sure I invoice them correctly ensuring the extra costs are covered to leave me with the exact base amount.
cms neuf - | 1,021
4 Aug 2019 #4
But nobody can answer that without knowing your business expenses - are you claiming your office, computer, Internet connection, etc against tax?

Also with the way you want to do it you will have to start invoicing them more when the preferential Social Security rate for new businesses finishes or if there are tax increases - it will be quite weird for them
Atch 17 | 2,915
4 Aug 2019 #5
The best thing is to get an accountant to work it out for you. It won't cost much and you'll know it's correct.
delphiandomine 83 | 17,771
4 Aug 2019 #6
That is why I quoted netto because I did not know what my obligations were going to be.

I can tell you with 99% confidence that they understood it as 8.6k netto plus VAT. B2B contracts are always structured in this way, and businesses will rarely agree to netto+costs because it's too complicated to work out from their POV.

Did you tell them this face-to-face, or was it accepted in an e-mail/written offer from them?

Do you have a contract? I'm happy to look at it for you to see what they understood by your offer.

it will be quite weird for them

And they're likely not to accept it if the contract clearly states x netto.
OP GaryB
4 Aug 2019 #7
Hi cms, thank you for your reply! Good question. I really do not know. It is all very new to me. Yes, I expect to claim additional costs like internet, phone, fuel etc and that comes out of my end. As for any increases with social security, I will probably have to absorb it. The main thing for me is knowing roughly how much I will have in my pocket each month to live on. I need to talk with them now that this has come to light.

Hi Delphi, we are meeting tomorrow to discuss the detail. I have not signed anything yet. There is still time to re-negotiate. I will be upfront and explain how I saw things. At least I know what to do next time.
delphiandomine 83 | 17,771
4 Aug 2019 #8
Aha, so this is good, you can fix the mistake:)

So, you'll need to ask for 11,700PLN roughly to get to 8600 net. Add in accountancy costs, and you're at nearly 12,000 + VAT.

Ask them for 13,000PLN + VAT. On a B2B contract, you cannot receive any corporate benefits, so you should factor that into the calculations. Also, make sure that there are no set working hours, and check to make sure that you can invoice for 160 hours monthly regardless of holidays.

There are quite a few pitfalls associated with B2B contracts, usually involving companies not paying holidays or other time off.

Aim for 14,000 + VAT, but don't drop below 11,500+VAT under any circumstance.
cms neuf - | 1,021
4 Aug 2019 #9
One other risk is that the govt has contractors who work for a single company in their crosshairs at the moment. Issue not so much for you as for your customer who might end up paying extra ZUS.

I had my own status questioned last month. I have 3 customers but one very dominant. You have to show them that you are genuinely independen

Anyway good luck with your discussions - better to straighten it out with them before you start.
delphiandomine 83 | 17,771
4 Aug 2019 #10
I had my own status questioned last month. I have 3 customers but one very dominant.

Yes, there are several things that they use to judge this. It can include:

- Does the contractor receive any benefits from the company? (lunch vouchers/private healthcare/Multisport cards/etc)
- Does the contract have a fixed place of work with an assigned desk and other 'typical employee' things?
- Does the contractor have a named manager?
- Does the contract have annual leave (holidays)?
- Is the contractor obliged to work a set amount of hours?

A true B2B contract should offer maximum flexibility for the contractor, and while informal deals can take place between employee and employer, the paperwork should always represent how a real contractor would work.
cms neuf - | 1,021
4 Aug 2019 #11
Yes - I got picked up because I was using the employers business rate at my hotel in Warsaw and it was marked on the hotel fakture vat ! I was careful about the other things
delphiandomine 83 | 17,771
4 Aug 2019 #12
One thing that I've heard them pull up people on is the lack of genuine business expenses - for instance, not buying computer equipment/accessories every so often. I had a chat with an HR manager friend of mine, and she says that they go as far as not supplying any equipment to contractors so that it's clearly a B2B relationship.
OP GaryB
5 Aug 2019 #13
@delphiandomine
Thank you so much for your advice! I really do appreciate it. We discussed it today and got it all sorted.
I am back on easy street and my client is happy which is the main thing.


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