The National Labor Inspectorate reform is getting closer

In this article, we analyze what tax consequences may arise from questioning B2B cooperation and why it is worth verifying current cooperation models before the new regulations come into force.

From July 8, 2026, information on PIP findings will be sent to the Social Insurance Institution (ZUS) and the National Tax Administration (KAS). Reclassification of a B2B contract may trigger consequences not only for the future but also for previous settlements. This may include corrections to PIT, consequences for CIT, and, above all, serious potential risks related to VAT.

Data exchange between PIP, ZUS and KAS

One of the key elements of the reform is the creation of an IT system enabling the exchange of information between the National Labor Inspectorate, the Social Insurance Institution and the Head of the National Revenue Administration.

The aim of the system is to analyze the risk of violations of labor law, legality of employment, tax law, social security and health insurance – each of these institutions will gain access to a wider range of data collected by other authorities.

If the National Labor Inspectorate (PIP) determines the existence of an employment relationship, this information can be forwarded to both the Social Insurance Institution (ZUS) and the tax authorities. In turn, data obtained by the National Revenue Administration (KAS) and ZUS can help labor inspectors identify cases of bogus self-employment.

Is the PIP decision retroactive?

The new regulations allow the labor inspector to issue an administrative decision confirming the existence of an employment relationship. Generally, such a decision takes effect from the date of its issuance.

The employer and the employee may appeal the decision to the labor court. An appeal suspends its execution until the proceedings are finally concluded. Only in exceptional cases involving individuals with special protection, such as pregnant women or employees nearing retirement age, will it be possible to make the decision immediately enforceable.

However, if it is necessary to establish that an employment relationship existed previously, the case will still need to be referred to a labor court. An administrative decision alone will not automatically have retroactive effects.

This doesn’t mean, however, that the past will remain beyond the authorities’ attention. Information about the establishment of an employment relationship may trigger tax or social security (ZUS) audits covering periods not yet time-barred.

Reclassification of a B2B contract and the consequences in PIT

The most obvious consequence of reclassifying the employment relationship is a change in the source of income. Remuneration previously accounted for as income from non-agricultural business activity (B2B contract) or personally performed activity (contract of mandate) may now be recognized as income from employment.

For entrepreneurs using contractor services, this means fulfilling the obligations of a personal income tax payer. They are obligated to collect advance personal income tax payments according to the rules applicable to employees (12% and 32%), and to prepare appropriate tax returns and information. This is directly related to their net income.

Much more serious consequences may arise if tax authorities question the accounting treatment for previous years. If it is determined that the B2B relationship should be treated as an employment relationship from the outset, it may be necessary to re-examine historical tax and contribution settlements.

In such a situation, the remuneration previously paid to the employee may be treated as a net amount. This would require determining the corresponding gross remuneration and settling any PIT and ZUS contributions due. Tax authorities may also demand payment of arrears for periods that have not yet expired. This is because the obligation to calculate, collect, and remit income tax advances rests with the payer, i.e., the employer.

For the employee, reclassification may mean losing the right to preferential taxation options available to entrepreneurs, such as a flat-rate tax or a lump sum tax on recorded income. The rules for accounting for costs and the method of calculating tax burdens also change.

At the same time, a taxpayer who previously settled tax as an entrepreneur may, in certain situations, apply for a refund of overpayment resulting from double taxation of the same remuneration.

Consequences for CIT purposes

Reclassification of B2B relationships also affects the way in which tax costs are recognized.

In the standard model, an entrepreneur deducts expenses resulting from invoices documenting the purchase of services from a contractor conducting business activity as tax-deductible costs. However, if it turns out that the collaboration should be treated as an employment relationship, we see a risk that these documents will lose their original tax function.

This does not automatically mean that you lose your right to deduct tax-deductible costs. However, it may be necessary to recreate the settlements using the formula appropriate for employee salaries. In practice, this requires detailed calculations, determining the gross salary, and taking into account contributions and other charges related to the employment relationship.

VAT – the area of ​​greatest risk

The most serious consequences may arise in the area of ​​goods and services tax.

Pursuant to Article 15, Section 3, Point 1 of the VAT Act and Article 10 of the VAT Directive, economic activity must be independent in nature. Both national and EU regulations indicate that activities performed under conditions similar to an employment relationship are not considered independent activities.

When assessing the nature of cooperation, tax authorities analyze, among others:

• • the degree of organizational subordination of the contractor,
  • using the infrastructure of the contracting entity,
  • the scope of economic risk borne by the service provider,
  • liability towards third parties.

If it turns out that the cooperation was not an independent business activity, the consequences may affect both parties.

The entity using the services may have its right to deduct VAT from invoices issued by the contractor challenged. As a result, it may be necessary to refund the deducted tax with interest.

In turn, a person running a business may lose the right to deduct VAT from their business-related costs. The authorities may deem that they were not, in fact, acting as a VAT payer.

An additional problem is Article 108(1) of the VAT Act. Even if invoices document activities that should not be subject to VAT, the taxpayer may be required to pay the tax shown on those invoices.

In some cases, it is also possible to establish an additional tax liability of 30%, i.e. the so-called VAT sanction (Article 112b, paragraph 1 of the VAT Act).

It’s also important to note that tax authorities’ analysis doesn’t have to be limited to the current period. Audits can also cover previous years, provided the tax liabilities haven’t yet expired.

Abolition – limited protection

The amendment provides for a one-year transition period for entities that decide to voluntarily regulate their relations with persons performing work.

If, within 12 months of the entry into force of the Act, the entrepreneur brings the cooperation that began before 8 July 2026 into compliance with the provisions of labor law by concluding an employment contract, he will not be subject to the fine provided for in the new regulations.

However, it’s important to remember that  this mechanism only applies to liability related to violations of labor law . It doesn’t cover potential tax or contribution consequences.

Conclusions

Although the reform of the National Labor Inspectorate is primarily associated with labor law, its implications may extend far beyond this area. Automatic exchange of information between the National Labor Inspectorate (PIP), Social Insurance Institution (ZUS), and National Revenue Administration (KAS) means that findings by one body can become a starting point for actions taken by other institutions. In practice, this means that the risk of questioning the cooperation model is no longer solely an “employee” risk, but is now having a direct tax and social security impact.

We recommend taking steps to diagnose whether your company has a problem with B2B contracts and whether there are factors that increase the risk of them being reclassified as employment contracts.

In this respect, we can support you by:

• identifying risk areas and preparing recommendations for changes,
• audit of cooperation models and identification of tax risks,
• support in designing a safe cooperation model.

In the current reality, preventive action is crucial – appropriate preparation now can significantly reduce the risk of disputes and potential financial burdens in the future.