Legal-tax conference for advertising, digital, event and PR agencies

On 25.9.2019, we organized a conference at HubHub in Bratislava on legal and tax topics that are particularly relevant to advertising, digital, event and PR agencies. After our last conference, which was dedicated to tax optimization for IT companies , this topic is another one that only underlines the benefits that accrue to clients who have legal, tax and accounting services under one roof.

It is “market standard” that the staff of such agencies work as contractors (through a trade or through their LLC) rather than being employed by these companies. It is possible to believe that the main reason for such arrangements is not so much the need to make the employment relationship more flexible, which may naturally appear to be rigid in the case of employment relationships under the Labour Code, but is just naturally economic reasons. For example, if a company has 20 employees with a gross salary of EUR 2 000, converting them into sole traders with a monthly invoice of EUR 2 000 would save the company approximately EUR 165 000 per year. Each of the employees would have a net increase of around EUR 400 per month. At first glance, this seems like a clear case.

However, the issue is not so black and white. On the one hand, the impact on employees’ potential social insurance income (i.e. old-age pension, sickness, unemployment insurance, maternity or disability pension) should be included in the overall calculation. It is also important not to forget the legal and regulatory aspects, as incorrect conversion of employees into contractors can lead not only to sanctions from the labour inspectorate, the labour headquarters, the tax office or the social insurance company. As a worst-case scenario, the potential for criminal liability must also be considered, as in certain circumstances a criminal offence of tax and insurance evasion may be committed. That is why the whole topic is not only a question of correct calculation in excel and agreement with employees. The topic is complex and proper setup requires the involvement of not only an accountant or tax advisor, but also a lawyer with experience in this area.

Since we as a company Highgate Group we specialise in tax law, start-ups and digital agencies, clients have it all under one roof. Quality and cost-effective.