NALED and KPMG held a webinar on the independence test for entrepreneurs

At the first webinar organized by NALED and KPMG, more than 120 entrepreneurs had the opportunity to learn more about the new independence test, which has been in use since March 1, 2020.

As it was said, if the entrepreneur does not “pass” the test, that is, if it is determined that there is no independence, all income paid from March 1, 2020 will be taxed with an additional 20% and 25.5% retirement and disability insurance contributions. Another option is that the employer and entrepreneur can switch to cooperation through the employment contract by April 30, with special relief for new employment.

Establishing the independence test as a tax measure has already had a positive effect, it was noted, because some employers have employed entrepreneurs who would not pass the test. For the violation of these regulations, a tax offense procedure will be initiated.

The independence test  consists of nine criteria, the application of which determines how much an entrepreneur is independent of the employer through tax control. That is, if an entrepreneur meets at least five of the nine criteria, he or she is found not to be independent.

The independence test is intended for all entrepreneurs and does not apply to attorneys, notaries and bailiffs.

Independence test criteria:

1. The employer determines the working hours or authorizes the entrepreneur to use annual leave and other types of absences for a fee
2. The entrepreneur uses premises or means for work financed or owned by the employer
3. The employer trains the entrepreneur and manages the work process
4. The employer advertises the positions for which he or she hires an entrepreneur or for that purpose, engages third parties engaged in finding adequate staff for the job.
5. The entrepreneur performs work with a employer in a team with employees or other entrepreneurs hired by the same employer
6. The entrepreneur gains at least 70% of the income in 12 months from the employer
7. The entrepreneur performs the employer’s business activities and does not assume business risk towards the employer’s clients
8. There is a wording in the employment contract that prohibits work for other employers
9. The entrepreneur works for the employer for more than 130 days a year