What is a B2B Contract?

A B2B contract in Poland is an agreement between two businesses (sole proprietors or legal entities) and is governed by the Civil Code. It does not require a work permit and does not provide the social guarantees inherent in employment contracts (umowa o pracę). The fundamental relationship is based on the execution of specific work or services and payment for them.

Advantages and Disadvantages of a B2B Contract

Advantages:

• No employer obligations for social security contributions on behalf of the contractor.

• Potential for a higher net income due to the employer’s reduced tax burden.

• The ability to legalize your stay in Poland by obtaining a temporary residence permit (karta pobytu) for business purposes.

Disadvantages:

• Lack of social guarantees: no paid vacation, sick leave, or maternity/paternity leave.

• High risks for entrepreneurs, especially those unfamiliar with the Polish tax and reporting system.

• The need to independently handle accounting, pay taxes, and manage ZUS (social insurance) contributions, which can significantly reduce the financial benefits of a B2B arrangement.

Who is Umowa B2B suitable for?

This type of contract is suitable for entrepreneurs and specialists in remote work and IT. B2B agreements are popular among programmers and other freelancers who value a flexible schedule and the ability to work for multiple clients simultaneously.

Taxes under a B2B Contract in Poland

When entering into a B2B contract in Poland, entrepreneurs must account for several taxes and contributions:

• Personal Income Tax (PIT – Podatek dochodowy od osób fizycznych): The rate can be 19% of income (linear tax, the “classic” form) or starting from 8.5% of turnover under the simplified flat-rate tax (ryczałt).

• VAT (VAT): The standard rate is 23%, but reduced rates and VAT exemptions are available (read more about VAT registration and rates here).

• Social Security Contributions (ZUS): Monthly payments depending on the type of activity and income. Preferential terms (ulga na start / mały ZUS) are available for new entrepreneurs during their first two years of business.

ZUS Contribution Rates for a B2B Contract in Poland

The amounts of ZUS contributions for entrepreneurs working under an Umowa B2B include:

Standard Payments:

• Pension Insurance: Approximately 19.52% of the minimum assessment base (the minimum base for 2024 is 4,242 PLN).

• Health Insurance (składka zdrowotna): 9% of income.

• Accident Insurance: The rate varies depending on the risk level of the profession.

Preferential Contributions for New Entrepreneurs:

• During the first 24 months, entrepreneurs can use the so-called “mały ZUS” (small ZUS), which offers reduced rates (the first six months are around 300-400 PLN per month; the following 1.5 years are about 600-800 PLN per month). These amounts can vary based on specific conditions and the entrepreneur’s income.

Flat-Rate Tax (Ryczałt) Rates for a B2B Contract in Poland

When using the ryczałt system (lump-sum tax on registered revenue) for B2B contracts, the tax rate depends on the type of service. Here are the main rates for 2024:

• 3% – Trading activities (retail/wholesale).

• 5.5% – Manufacturing services and construction work.

• 8.5% – Services not listed in other categories.

• 8.5%-12% – For IT specialists (read more in the article: Ryczałt Rates for IT Specialists).

• 17% – Liberal professions (e.g., architects, journalists, translators).

• 20% – Licensed professions (e.g., lawyers, doctors, veterinarians).

These rates apply to revenue (without deducting business expenses), making them attractive for activities where the cost base is minimal or non-existent.

Conclusion and Termination of a B2B Contract

Entering into a B2B contract requires registering a business (as a sole proprietorship – działalność gospodarcza – or a legal entity in Poland) and fulfilling tax and social security obligations. Termination of the contract can occur at any time without prior notice, requiring the contractor to be prepared for the sudden loss of their income source.

Obtaining a Temporary Residence Permit (Karta Pobytu) via a B2B Contract in Poland

If you are registered in Poland as a sole proprietor and have signed a B2B contract with a client, after 2-3 months of operation, you can apply for a temporary residence permit. The documents you will typically need include:

• A lease agreement for your apartment/house (proof of accommodation).

• A revenue and expense ledger (KPiR) or incoming invoices (invoices), and ZUS declarations.

• A business plan describing your activities.

• A certificate of no tax arrears (zaświadczenie o niezaleganiu w podatkach).

• A completed application form (wniosek) with confirmation of payment of the administrative fee and 4 photographs.

Processing times are always individual and depend on the voivodeship (region) you live in. On average, the procedure can take from 1 to several months. In most cases, your first residence permit will be granted for 12 months.

Conclusion

Umowa B2B in Poland is a beneficial but demanding form of contract that requires a careful approach. Statistics show that using B2B agreements allows employers (clients) to save up to 20% on taxes and social security contributions. Experts recommend thoroughly analyzing all financial and legal aspects and consulting with an accountant before signing this type of contract.

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