Self-employment: opportunities for checking persons in Globas

The self–employed are a special category of taxpayers, individuals or individual entrepreneurs who have switched to a special tax regime with a reduced rate. It is also called the Professional Income Tax (PIT). Under current legislation, the tax rate for those who work with individuals is 4%, and for those who provide services to legal entities or individual entrepreneurs – 6%.

Every year the popularity of this tax regime is growing. In 2022, the number of self-employed reached 4 million people and has already exceeded the number of individual entrepreneurs.

The self-employed can provide an extensive list of jobs and services: from layout of websites and writing texts to legal advice and accounting. In cooperation with such experts, enterprises receive a number of advantages:

• exemption from payment of personal income tax, insurance premiums and pension contributions, which saves about 30% monthly from the standard salary of a full-time specialist;
• payment is made for the work done, and not for the time spent in the office, without the need to provide labor guarantees in the form of sick leave and vacations;
• the possibility of remote cooperation.

The benefits will be available only if there is a receipt confirming the payment made for the work under the contract. A bill from a self-employed person will also be needed for tax reporting to prove that the payment was made legally. If this rule is ignored, problems may arise for both the customer and the self-employed: the tax authority may suspect that illegal monetary transactions are carried out in the company, and the contractor hides income.

However, in case of violation of the legislation governing the application of a special tax regime, the customer of services may be held liable. And these mean fines, inspections and lawsuits.

Rule No. 1: don't hire former employees as self-employed

The main restriction when working with the self–employed is the prohibition on substitution of labor relations for civil law ones. Therefore, the Law No. 422-FZ "About carrying out experiment on establishment of special tax regime "Tax on the professional income" prohibits ordering services from persons who have been employees of your company for the past two years.

If you keep lists of employees in Globas, its tools will help you to identify whether the self-employed applicant is your former employee.

Rule No. 2: check the partner's tax status

As long as the performer has the status of self-employed, he/she pays the tax on his own. However, if the status is abandoned, the customer company begins to be responsible for paying taxes and contributions.

The reasons for the loss of status may include voluntary de-registration of the self-employed, exceeding annual income of 2,4 million RUB or non-payment of tax.

It is important to understand that a change in the tax status can occur at any time: when the contract has already been signed or after the advance payment. Therefore, it is very important for customers to update this information at every stage of cooperation with a self-employed contractor.

Globas helps simplify routine tax status verification. There are two ways to check whether your potential contractor is a payer of Professional Income Tax:

• receiving information about self-employment directly when checking in the person's profile, with the ability to quickly update the status from the Federal Tax Service;
• ordering an extract "Self-employed status check" for a specific date in the "Extracts" section.

Rule No. 3: analyze the counterparty's participation in the courts of general jurisdiction, instead of arbitration ones, before concluding the contract

In case of a conflict with the self-employed, it is necessary to apply to the district courts of general jurisdiction, which implies a different approach to preparing for the case and other terms of dispute resolution than in the arbitration process.

Before entering into a contract, check whether the expert is already involved in litigation. Of course, there may be different categories of cases, and the nature of disputes may not be related to the professional qualities of the performer. But if there are many such courts, it is possible to draw unambiguous conclusions about the systemic non-fulfillment of certain obligations.

The real advantage of Globas when working with courts of general jurisdiction is the convenient search tool. Globas searches across all regions at once and offers convenient filters to narrow down search results: by type of court, case type, period and other parameters.

Rule No. 4: check for arrears, fines, penalties

Personal problems of the self-employed can affect the fulfillment of obligations. If a person does not fulfill the terms of the loan agreement, there is a court decision on debt collection and enforcement documents are transferred to bailiffs, the funds that the customer will pay for the work may be seized. That means, all the income of the self-employed will be used to repay the debt to the bank. As a result, the self-employed will not be able to purchase materials for the execution of the order, and you risk not getting the expected result of the work.

Timely check and identification of risk factors for individuals in Globas will help to learn about some problems in advance:

• overdue charges;
• judicial and extrajudicial bankruptcy;
• tax and legal debts, fines, penalties;
• active and archived enforcement proceedings.

Rule No. 5: enter into a contract

You can negotiate with the self-employed verbally, but only if you buy the finished product at sight. If your interaction with an expert requires his/her work, and the final result will be provided after any period of time, the conditions must be fixed in a written contract.

As a rule, several types of contracts are concluded with the self-employed:

• contract agreement;
• contract for the provision of paid services;
• the contract of the uniquely designed order.

Important! To avoid disputes with tax authorities, cooperate with the self-employed when it is necessary to perform specific work that is not included in the functionality of your employees. If you need an expert to perform duties for a long time, as well as if control of the work process itself is necessary, enter into an employment contract.