Professional IT people in Poland have been exploring remote working for some time. They’re currently living the high-paying life with its lenient approach to freelancing contracts and are tempted by even higher wages that could come from moving their base of operations overseas, but changes on tax laws may make this difficult going forward if they aren’t careful about what’s legal now versus illegal later down the line.
For a couple of years, 37-year-old IT security analyst Aleksander Dros did what most Polish IT workers did when they got a job offer abroad: he packed his bags, accepted that he would see his family at most every other weekend, and moved to Brussels to work as a penetration tester. But after half a year, he wanted to go back to Poland due to the birth of his child.
The ethical hacker tells me about their new deal, where they would work two weeks per month in Brussels and another three from home while renting co-working spaces. “And when COVID came,” the person says with a smile on their face (COVID being short for Cybersecurity Awareness Week), referring to last year’s big cyber attack that targeted computers around Europe using ransomware initially called Wannacry…
The Business to Business contract (B2B) has been a popular choice in Poland for those looking to create an employment relationship with less rigidities than standard labor contracts.
The popularity of this type of work-based agreement is on the rise because small and large businesses alike find it more cost effective, while at times offering better flexibility when both sides are satisfied that they will get what they want out TAKEOFF They are meant for freelancers, but usually have a broader scope than features a standard freelance arrangement might include, such as fixed duration or exclusivity.
According to research by NoFluffJobs, a Polish platform for IT freelancers, nearly a third of IT specialists in the country work using a B2B contract. While it’s still less prevalent than the typical employment contract, it is much more popular among experienced workers. When it comes to countries, Great Britain, Scandinavia and Germany are the most popular ‘digital’ destinations. “In these times of digital transformation, we see even more barriers disappear, and there is nothing that would stop people working remotely for countries in Asia or Australia,” NoFluffJobs CEO Tomasz Bujok tells ZDNet.
Working abroad as a freelancer is not only an opportunity for increased income but also the chance to live in Poland and work comfortably. With low cost of living, you can make up two-to three times more than if wages were higher at home while still enjoying lower prices on food/ shelter etc., making this arrangement quite lucrative overall!
Bordered by four nations (Germany & Belarus in particular) Lake Balaton forms much importance during summertime vacations when families flock there either spontaneously or specifically because they know their kids will have fun playing beside river which borders both sides
The B2B contract is also the only viable arrangement available to Polish IT workers who want to work for organizations in another country without moving abroad. But even if they had a choice, the arrangement would still remain very popular among the specialists, largely thanks to other benefits it offers that are designed to stimulate educated professionals to move more freely through the economy.
“Taxes are lower,” says Krzysztof Lis, who works as a standardization specialist for digital telecommunication. “If I had to work as a freelancer from, say, the United Kingdom or Germany, I would probably have to pay much more.”
Tax breaks and cushy perks
In addition to tax breaks, IT workers in Poland can take advantage of incentives like the IP Box incentive which offers an additional tax break for any work classed as research and development. Such perks allow them compete on Western European or American job markets while still receiving this benefit at home with their company’s bidding process
The booming economy there has made it so companies receive high quality service from qualified candidates who are willing enough but also have more freedom under certain circumstances than those here competitors looking abroad would be facing-and may make up some ground too!
“The lack of IT professionals is far more serious in Scandinavia than it is here,” says Szymon Bialy, a programmer and IT architect working mainly on a project basis for a Danish company. According to the bank Pekao, Poland has a deficit of around 50,000 IT specialists on the job market. But a country like Sweden, which has less than one-third of Poland’s population, is expected to have a shortage of 70,000 by 2022.
In Poland, freelancers are not required to have a minimum number of customers or other requirements that would make them unfit for the country’s business-to-business (B2B) contracts. This means these exclusivity deals can bring some benefits in return; many people who work exclusively abroad but receive compensation because they miss out on all those normal labour contract perks like annual bonuses and sick days .
The rules regarding freelance workers vary greatly depending what part of Europe you’re looking at: while France has similar regulations with regards to how much time one needs working before being eligible
“I think the only perk I do not get that those working at the American offices do is employer health insurance, something that is universal in Poland anyway,” says Artur Piszek, an engineer who works exclusively for US-based Automatic.
“Right now, I am on parental leave, and I get a stipend to use for renting co-working spaces. I don’t need to track hours or anything, and work-related trips are fully paid for.”
When it comes to job certainty, which for those on a B2B contract is basically non-existent, Piszek shrugs: “American companies can fire their people easily anyway, so my situation isn’t any different.”
The pandemic has put remote working in the spotlight all over the world. But over the years, it has become second nature. Dros used to work in a co-working space using an extra allowance until the pandemic hit. Now, he simply works from a home office.
The isolation of being self employed is what’s really tough about COVID-19 for Lis. “The loneliness has been my downfall,” he says with a sigh, but then adds that since this pandemic there have been more opportunities and neighbors to keep him company while working at home as an independent contractor on their own dime!
“It was never easy before; people just didn’t do it because they were too busy or had no choice.” Nowadays though? When you’re down days both figuratively–because someone abandoned us all in 2016–and literally from lack of electricity (literally), having other souls around can
Another downside is the lack of networking opportunities, especially for those preferring a more traditional freelance life with multiple clients and projects.
The challenges of building a network across borders is tough, says Bialy. He works through an agency that offers near shoring services and this helps him overcome many difficulties in connecting with other companies around the world who also share his interests as well! His company takes about 25%of total fees from projects; however he believes it’s worth carrying these costs due to how much work goes into making sure everything runs smoothly
Achieving international business can be difficult because there are so many different regulations between countries – but somehow Polish firm Mr Nail has figured out how build its clientele up by offering concrete solutions such us specialist steel cages for skyscraper construction or bridge piling units
“Another pro is that there is also a better balance between the client and the worker. The relationship between two organizations is much more business-like.”
Such flexibility benefits the economy in general, and justifies the tax breaks this group is getting, says Przemyslaw Pruszynski, secretary of the Tax Council of Lewiatan, Poland’s largest business association.
Pruszynski tells ZDNet: “On top of [paying income tax] they need to pay their healthcare insurance and pensions themselves. They also take more of a risk, and it’s generally harder to attain your income this way.”
An end to the dream?
The debate on whether the self-employed should be taxed more or less than conventional employees is happening all throughout Europe. Poland has just proposed a new tax package that seeks to even out these differences with its citizens, especially those in creative industries who often find themselves struggling financially as they do not receive benefits from their work like paychecks every week and health care coverage when needed; but what does this mean for you? It may affect how muchriskingin orderforameet your needs
Essentially it would create two types of people: employed vs unemployed which means there’s no guarantee if someone works hard enough then eventually success will come along because either way he/she’ll probably end up getting paid
The biggest proposed change is to abolish the flat fee for state health insurance and the state pension for the self-employed, which would drastically hike up their health payments. Despite a proposed compensation in the form of a higher tax-free allowance, it will almost certainly make IT workers pay more.
For some, this can be reason enough to move to a different country, says Pruszynski, who warns that the proposal could also have a cooling effect on Poland’s IT specialist market.
When asked about the funding of tax proposals, workers are universally negative. They say that while it is true some improvement to healthcare facilities may come from hiking taxes in their country as proposed by ZDNet-the money goes elsewhere and these further improvements do nothing for them on a personal level. “I would need to pay more into the state pension system, while I would still get the same low pension payment in return,” Lis said. Dros and Piszek hate the idea as well, though acknowledge that taxes would be lower than in the west.
Bialy, meanwhile, is already drawing up a plan B. “I am already looking into possible emigration to the Czech Republic if the plans go through, but that’s truly a last resort,” he says.