Billing without being self-employed: When to do it and when not to do it
Posted: Wed Dec 18, 2024 5:11 am
In this post, we tell you when it is possible to invoice without being self-employed and when you have to register with Social Security.
Billing without being self-employed is an exceptional situation
The lack of regularity is the key to a billable activity not implying registration as a self-employed person
Invoicing without being self-employed (without registering with the corresponding Social Security system ) is a special situation, rare but possible. It usually occurs in cases cyprus email list where someone carries out an activity complementary to their main job for which they have a low income. They may need to document these operations in an invoice (because the client asks for it, for example), but they are thinking about how to save the contribution .
In fact, in low-paying activities, the contribution can discourage the decision of whether to carry them out or not. Therefore, it is important to understand what it means to invoice without being self-employed and when and how it can be done .
Start of marked textSHARE! Can you invoice without being self-employed? Find out when it is possible.End of marked text
1) Where does the obligation to invoice come from?
Invoicing is, according to article 164.One.3 of the VAT Law, one of the obligations of VAT taxpayers . In this tax there are several types of taxable events , each with its own taxpayers. In any case, the most common case is that it is business owners or professionals who are obliged to issue and deliver invoices.
Invoicing is a formal obligation that facilitates the documentation of operations and the management of taxes, especially VAT.
Therefore, beyond some exceptional cases, the question usually lies in knowing when we are dealing with a businessman or professional . Within these, although it may seem like a tongue twister, the most common case is that in which a business or professional activity is carried out . This requires the following requirements:
The activity must involve the independent management of material and human production factors, or one of them.
Its purpose must be to intervene in the production or distribution of goods or services .
2) Doubtful cases in the billing of self-employed workers
Although the definition of business or professional activity may seem clear and simple, many doubts may arise . These arise especially in cases where there is a connection with the client or there is a suspicion that an employment relationship is being concealed.
In situations like these, there may be an inspection or other type of check . Whether the invoice is issued, the VAT forms are submitted or the way in which the income is declared in other taxes does not change anything. It will end up being settled according to the true reality of the operation , beyond what appears based on how the tax obligations are fulfilled.
When we are going to start invoicing, we must consider whether this document is the most appropriate to document the reality of the operation.
Therefore, invoicing is not a kind of 'shield' to be able to pay taxes in the way that suits us best. For example, we cannot replace a payroll with an invoice. However, this happens in the fiscal field and does not always have repercussions in other areas . For example, an invoice may reflect an operation subject to commercial and not labor regulations, but whose income must be taxed as employment income.
Billing without being self-employed is an exceptional situation
The lack of regularity is the key to a billable activity not implying registration as a self-employed person
Invoicing without being self-employed (without registering with the corresponding Social Security system ) is a special situation, rare but possible. It usually occurs in cases cyprus email list where someone carries out an activity complementary to their main job for which they have a low income. They may need to document these operations in an invoice (because the client asks for it, for example), but they are thinking about how to save the contribution .
In fact, in low-paying activities, the contribution can discourage the decision of whether to carry them out or not. Therefore, it is important to understand what it means to invoice without being self-employed and when and how it can be done .
Start of marked textSHARE! Can you invoice without being self-employed? Find out when it is possible.End of marked text
1) Where does the obligation to invoice come from?
Invoicing is, according to article 164.One.3 of the VAT Law, one of the obligations of VAT taxpayers . In this tax there are several types of taxable events , each with its own taxpayers. In any case, the most common case is that it is business owners or professionals who are obliged to issue and deliver invoices.
Invoicing is a formal obligation that facilitates the documentation of operations and the management of taxes, especially VAT.
Therefore, beyond some exceptional cases, the question usually lies in knowing when we are dealing with a businessman or professional . Within these, although it may seem like a tongue twister, the most common case is that in which a business or professional activity is carried out . This requires the following requirements:
The activity must involve the independent management of material and human production factors, or one of them.
Its purpose must be to intervene in the production or distribution of goods or services .
2) Doubtful cases in the billing of self-employed workers
Although the definition of business or professional activity may seem clear and simple, many doubts may arise . These arise especially in cases where there is a connection with the client or there is a suspicion that an employment relationship is being concealed.
In situations like these, there may be an inspection or other type of check . Whether the invoice is issued, the VAT forms are submitted or the way in which the income is declared in other taxes does not change anything. It will end up being settled according to the true reality of the operation , beyond what appears based on how the tax obligations are fulfilled.
When we are going to start invoicing, we must consider whether this document is the most appropriate to document the reality of the operation.
Therefore, invoicing is not a kind of 'shield' to be able to pay taxes in the way that suits us best. For example, we cannot replace a payroll with an invoice. However, this happens in the fiscal field and does not always have repercussions in other areas . For example, an invoice may reflect an operation subject to commercial and not labor regulations, but whose income must be taxed as employment income.