B2B – general characteristics
B2B agreement in the most common sense of this word is nothing more than one of the forms of “employment” of a person to perform a specific type of tasks, aside from the regime of the employment contract. B2B agreements can appear in any business sector, while in the IT they are used particularly often. A B2B agreement differs from an employment agreement in much greater freedom in terms of time and tasks of the contractor (i.e. “employee”), the lack of rigid holiday rules or sick leave, the lack of specific rules regarding working time and place of work, wider limits of the contractor’s liability to the typical employee and above all else – differs from the employment agreement in terms of applicable taxes and social security contributions.
An “employee” on a B2B contract is a person who most often runs a sole proprietorship (i.e. one that is subject to entry in the CEIDG). Therefore, he settles and pays his social security contributions (i.e. ZUS) and taxes (PIT and VAT) himself. He also settles any possible costs of running his business. Sometimes there are also B2B agreements in which the “contractor” is a trading company (most often a limited liability company).
The first element that most developers think of as an argument for using a B2B agreement in the IT sector is the popular “IP Box”. The IP Box can only be used by entrepreneurs. Developers employed under an employment contract will not be entitled to use IP Box – alternatively, they can possibly benefit from the 50% rate of tax deductible expenses instead of 20% rate.
IP Box is a preferential form of taxation of developer’s income (5% income tax rate) compared to other forms of taxation (e.g. scale, flat tax or lump sum). However, it should be noted that the 5% rate for developers will only apply to income received from copyright to a computer program created or developed within the scope of the developer’s research and development activity. To put it simply – in order to use the IP Box it is necessary to create a proprietary computer program or develop it creatively. Lack of creative elements (e.g. sale by the developer of a license to an already created and unchanged computer program, i.e. receiving income from the sale of standard solutions) will deprive the developer of the possibility of using the IP Box.
It is rare that all of developer’s activity consists in research or development and all income is received from the copyright to a computer program. Part of the work of every entrepreneur is strictly administrative activity, accounting, conceptual, organizational, etc. That is why it is so important that the developer, in order to use the IP Box, keeps a record of creative activity every month. As a consequence to that he will be able to extract the part of activities (and income due for their fulfillment) that qualify to the application of the preferential tax rate (IP Box).
Therefore, it is extremely important to construct a B2B agreement in such a way that it is possible to extract the creative and non-creative activities of the developer and assign the appropriate part of the developer’s remuneration to such individual activities (creative or non-creative).
Important elements in B2B contracts in the IT sector
Besides the provisions facilitating the application of the IP Box relief, the elements that should certainly be reflected in the B2B agreement in the IT sector are:
- regulation of the copyrights – the lack of such regulation may deprive the “employer” of the possibility of using the creative effects of the developer’s work; it should be noted that the sale of copyrights is not the only legal possibility of their use by the “employer” – the parties also have the option of granting a license to use these rights; the difference between these two options can be compared to the difference between a sale agreement (disposal of proprietary copyrights) and a lease agreement (license to use proprietary copyrights);
- regulation of the confidentiality rules – developers often gain access to confidential information of the “employer” (e.g. financial, human resources, business, technology), the disclosure of which could cause important harm. Therefore, it is worth taking care of the relevant provisions in the B2B agreement in advance, which will minimize the risk of disclosing such information (e.g. by implementing contractual penalties to the B2B contract);
- regulation the non-competition clause during the term of the B2B agreement and possibly after its termination and/or expiry – this is particularly important in the case of developers with a narrow specialization. More information about the non-competition clause after the termination of the civil law agreement (such as the popular “B2B”) might be found in our article: https://milewska.legal/zakaz-konkurencji-w-umowach-cywilnoprawnych/.
The parties to the agreement are responsible for regulating the remaining elements (e.g. remuneration, possible hours of the developer’s availability every day or week, possible free time of the developer, reporting on the progress of work, law applicable to a given agreement, etc.) and they have a relatively large freedom here. In the case of B2B agreements, there is no minimum wage, minimum annual leave or maximum working time standards.