Legal alert no. 81
Legal Alert no. 81 – Amendment of the self-employed employees’ contributory scheme
Decree-Law no. 2/2018, of January 9th, which established changes to the contributory scheme of self-employed workers, took effect from January 1st, 2019.
Thus, self-employed workers, when subject to social security contributions, must declare quarterly:
a) the total income resulting from the production and sale of goods;
b) the total income resulting from providing services.
The declaration shall be submitted up to the last day of April, July, October and January, regarding the income obtained in the previous quarter.
Regardless the obligation to comply with social security contributions, in January self-employed workers must confirm or declare their income information for the previous calendar year.
The social security services shall revise, annually, the declarations for the previous year on the basis of the income statements and shall notify the employee of the differences ascertained.
What changed for the contracting entities
Legal persons and natural persons with a business activity, regardless of its nature, which/who in the same calendar year benefit from more than 50% of the total value of one self-employed worker’s activity, are “covered” by the scheme as contracting entities.
In the case of first enrolment in the self-employed workers’ scheme, the scheme takes effect on the first day of the 12th month following the beginning of activity.
The payment of social security contributions is monthly and must occur between the 10th and the 20th of the month following the one that it pertains to.
Monthly contributory base
The monthly contributory base corresponds to 1/3 of the relevant income calculated in each reporting period, taking effect in the same month and in the following two months.
When there is no income or the value of the contributions due to the relevant income is lower than € 20.00, the contributory base is determined according to contributions in that amount.
Contributions rates are reduced:
- from 29.6% to 21.4%, for self-employed workers;
- from 34.75% to 25.2%, for sole traders and single-person limited liability companies.
The contributions rates to be borne by the contracting entities shall be as follows:
a) 10% in situations where the economic dependence exceeds 80%;
b) 7% in other situations.
The contributions of contracting entities to services provided by self-employed workers are intended to protect the self-employed workers in the event of immediate occurrences.