Employing sole traders (the shvarc system) is also about “one-person LLCs”. The difference is not only from a legal point of view

A company with an annual turnover of almost EUR 1 billion used maintenance workers as self-employed persons (i.e. not employees) to work in its premises. This was challenged by the Labour Inspectorate. Would it have been different if they were “SROs”? Employing sole traders (the shvarc system) is also about “one-person Ltds”. The difference is not only from a legal point of view. “SROs” (as opposed to sole traders), are allowed to have both real expenses and a VAT deduction. For example, such a car purchase with VAT deduction is very popular in practice. However, be careful about the VAT deduction so that it does not become excessive (even if you are not paid). That is, if the tax authorities have such a problem with the car (garage door, office furniture at your home, flat, …) that they refer it to the police, no effective regret (= via a top-up tax payment) is possible in tax fraud. That’s why loans rather than cash and leasing rather than credit… At the same time, some “SROs” do better not only with higher incomes (e.g. after exceeding flat-rate expenses or VAT turnover), but also with an income of e.g. 15,000 EUR/year, because:
➡️ approx. 7% annual increase in the amount of minimum levies;
➡️ from 2024 the rate of health levies is increased;
➡️ 15% tax rate for POs. This is despite the fact that even managing directors have to pay minimum health levies and dividend tax has increased to 10%. 👉 We are organising a conference on this on 18 April 2024, where we will link law, tax, levies and accounting precisely. In addition to myself, Katarina Matulnikova, Tomas Strémy and Martin Vlachynsky will be speaking there. 👉 Attention ! There are only a few places left (link to register for the conference in the comments).