When concluding a civil labor contract, who is responsible for labor protection - an individual or an organization?

What is GPC?

This agreement is considered a legal transaction; it can also terminate certain rights, for example, those specified in the agreement establishing the rules for the provision of services. The contract itself is regulated by Art. 153, 154 and paragraph 1 of Art. 420 GK. It is concluded between an individual and a legal entity. It must define the relationships that will be associated with the final product of the activities of both parties; one of them acts as a performer, and the second as a customer.

The contract must comply with the rules of the Civil Code of the Russian Federation; it is not identical to the labor contract and has a number of subtleties that must be taken into account. The main feature of the GPC agreement is the ability to prescribe various requirements and points that do not violate the laws of the Russian Federation, as this is done, indicated in Art. 421 Civil Code.

Important nuances regarding taxes and contributions when working under the GPA

Civil contracts, like employment contracts, as well as any business activity, are subject to tax and insurance fees. But here, too, there are some peculiarities; let’s look at insurance fees paid to extra-budgetary funds:

1. For remuneration under a GPC agreement, if it is concluded with an individual. person (person), mandatory insurance contributions must be charged for mandatory pension insurance (MPI) and medical insurance (CHI). Social There is no need to transfer payments for the performer to the Social Insurance Fund for disability and maternity (this is established in paragraph 2 of paragraph 3 of Article 422 of the Tax Code of the Russian Federation). Payments for social insurance against accidents and occupational diseases are made only when this is established in the GPA, as stated in paragraph 1 of Article 20.1 of Regulation No. 125-FZ).
2. Personal insurance premiums must be charged on the full cost of the GPC contract minus the costs that the person incurred when performing services under the contract. This requirement (for non-taxable amounts) is established in paragraphs. 2 clause 1 of Article 422 of the Tax Code. You just need to take into account that the expenses for the GPA must be documented, that is, the contractor must provide the customer with a primary report (Article 431 of the Code).
3. If we talk about the timing of accrual of fees, then the Letter of the Ministry of Finance dated July 21, 2017 No. 03–04–06/46733 establishes that contributions must be accrued on the day when a bilateral act on the work performed is signed.
4. Please note that the customer does not have to pay contributions for health insurance and compulsory medical insurance if the work is carried out by an individual entrepreneur. Private businesses are obliged to transfer such fees themselves (see paragraph 1 of Article 419 of the Tax Code of the Russian Federation).

Regarding tax payments, we note several points:

1. Standard remuneration under a civil law contract, being the income of an individual. persons are subject to personal income tax. Moreover, the tax fee must be withheld not only upon completion of work and approval of the act, but also from advance payments. This is regulated by paragraphs. 1 clause 1 of Article 223 of the Tax Code of the Russian Federation, and explained in the Letter of the Ministry of Finance of the Russian Federation dated July 21, 2017 No. 03–04–06/46733.
2. If the individual declares the need for a professional deduction, the customer company must calculate and take this point into account when paying remuneration (see the requirements of clause 2 of Article 221 of the Tax Code of the Russian Federation). Just as in the case of insurance premiums, to calculate the deduction, the individual entrepreneur must confirm his expenses with primary documents. Naturally, the receipts or TTN must include reasonable expenses for the purchase of raw materials or supplies that are necessary to support services under the GPC agreement. Moreover, it must be taken into account that the deduction must be taken into account regardless of when these business expenses were incurred (comments on this issue can be clarified in the Letter of the Ministry of Finance of the Russian Federation dated October 25, 2017 No. 03–04–06/69945).
3. Phys. persons who work under a GPC agreement have the right to a standard tax deduction established in Article 218 of the Tax Code of the Russian Federation. But, please note that for the property deduction for individuals. a person in this option has no right. The reason is that the deduction for personal property is provided only by the employer, and when concluding a GPA, the organization with which a person has an agreement is not an employer in relation to him. This is regulated by clause 8 of Article 220 of the Tax Code of the Russian Federation, explanations can be seen in the Letter of tax authorities dated 03/07/2017 No. BS-4–11/ [email protected]

And an important point regarding the customer’s reporting when conducting GPC agreements: the contractor’s remuneration is reflected in the calculation of 6-NDFL for the company, as well as in the annual 2-NDFL certificate, which, by the way, must be issued to him at the request of the contractor.

And lastly: in the case where the GPA is concluded with an individual entrepreneur, he pays personal income tax independently based on his profit.

Main types of GPC

A GPC agreement can only be drawn up between a legal entity and an individual.

The following GPCs are distinguished:

Any of the listed options is paid, so the customer is obliged to transfer the amount agreed upon by the parties upon completion of the actions. A distinctive feature of this type of legal relationship is the receipt of a finished result separately from the work.

Kinds

A civil contract with an individual is an agreement that an enterprise or entrepreneur signs with a citizen for the purpose of providing a one-time service or performing work. This allows you not to include a person on the staff.

In practice, the following types of GPC agreements are used::

• property – for the purchase, exchange or gift of property;
• performance of work (contract) - the citizen is a contractor and performs certain work on the instructions of the customer;
• provision of services - the contractor performs certain intangible actions on behalf of an entrepreneur or organization;
• order - an individual on behalf of the customer, by proxy, executes the order;
• agency - a citizen as an agent makes transactions on behalf and at the expense of the customer;
• commission - an individual independently and at the expense of the principal enters into contracts;
• copyright – copyright is transferred to newly created or existing objects.

Differences between an employment contract and a GPC contract

Civil law relations should not be confused with labor relations, since they are established by fundamentally different types of documents. For a contract under the Labor Code, the main goal is precisely the labor function, when an employee performs any paid actions on an ongoing basis, but for the GPA, the result is important, and it does not matter what work will be done and by whom. The main thing is that the finished result is provided on time, and the work must be presented in proper quality.

A hired contractor differs from an employee registered under the Labor Code in the following factors:

• Not included in the current staff of the employer's company.
• May not comply with the work schedule at the enterprise.
• Does not report to the head of the employing organization.
• Does not have to perform functions related to his job task; he can delegate them to a subcontractor.
• Salaries are not paid based on working hours. They pay a fee for the finished result.

According to Art. 15 of the Labor Code of the Russian Federation does not allow the use of a GPC agreement instead of an employment agreement, since these concepts are not identical. If an employer and an employee have an employment relationship, then it is necessary to draw up an agreement according to the Labor Code. If such a document is available, the employer must write the work schedule, the salary amount, and accurately determine the list of all actions that the hired employee must perform. In addition, the latter will require the creation of suitable working conditions. The contents of the document are regulated by the requirements listed in Art. 57 TK. Unlike an employment contract, GPC is regulated by the Civil Code, not the Labor Code.

Who can I make a deal with?

The legislation allows concluding a GPC agreement with ordinary people. Depending on who the citizen is, the issue of paying taxes on income is decided.

Combinations of parties to the contract:

• both are entrepreneurs;
• the customer - entrepreneur, performer - does not have such status;
• the employer is not registered as an individual entrepreneur, the employee is carrying out entrepreneurial activities;
• the agreement is concluded between ordinary individuals.

In the first case, both parties pay taxes, since they are registered as individual entrepreneurs. In the second option, the employer pays insurance premiums and personal income tax. In the third, the contractor makes all the necessary payments himself. In the fourth, both citizens have responsibilities for mandatory contributions and reporting.

The law allows you to enter into both an employment contract and a GPC agreement with full-time employees. At the same time, the subject of the second agreement should not be related to long-term work that has signs of part-time work.

Separately, it is worth noting agreements with citizens of other countries. A foreigner must be a highly qualified specialist and have a work permit in the Russian Federation. The customer must inform the tax authority, employment service and the Federal Migration Service about the fact of concluding the agreement.

Pros and cons of GPC

This type of agreement is quite beneficial for an individual. It has the following advantages:

• In collaboration there is no leader. Such an agreement creates a partnership legal relationship where the parties are equal.
• The contractor does not comply with the schedule according to which the employer works. He can work any days and hours that suit him. This is because the contract relates only to the result of work that must be completed by a certain date.
• The customer is obliged to pay a fee for the result obtained, observing the terms of the agreement, otherwise he may be held liable.

However, GPC is not without its disadvantages, which include the following disadvantages:

• Lack of social security for the employee.
• The employer must not ensure the working conditions of the performer or prepare a workplace for him.
• The customer does not pay the costs of working materials, inventory, and consumables.

They can be included in the cost of the final result, but are not listed as a separate item, since by default these costs are borne by the contractor.

Procedure for terminating a civil contract

The civil contract ends when all the work has been completed in full and the customer has accepted it.
However, situations arise when the contract must be completed before this point. If the parties’ desire for termination is mutual, then an agreement can be drawn up and signed. It must indicate that the contract is considered terminated for a certain reason, and the parties have no claims.

If termination occurs at the initiative of one party, then this can only be done in court. In this case, the initiator of termination must send a written proposal to the other party, and if no response is received or a refusal is received, apply to the court with a request for termination. It is important to initially draw up the contract correctly and indicate in it specific grounds for termination.

Filling out the GPC agreement

To ensure that none of the participants refuses to fulfill their responsibilities during the work process (for example, the customer refuses to pay or the contractor refuses to provide the result), the contract is concluded in writing. You should avoid language found in an employment relationship document, such as the words “employee,” “employer,” or “salary.” If these conditions are not met, the contract can be considered an employment contract, and organizations may be assessed a serious fine for violating the requirements of the Labor Code of the Russian Federation.

The document form must contain the following items:

• Details of both parties involved in the transaction. The organization ordering the service must enter its full name. It is necessary that its director be indicated, as well as the official responsible for concluding such agreements. The form must also contain information about the performer, for example, his passport details.
• The contract must contain the subject, the exact wording of the task, a description of the final result or its address.
• The document includes the basic characteristics of the subject of the agreement, the conditions under which the work will have to be done, and its volume, the same rule applies to the provision of services. Subtleties such as providing tools, equipment, or supplies are also covered in the text.
• You will also need to take into account the order in which the work is performed and the finished result is delivered to the customer.
• Payment procedure and amount of remuneration.
• Responsibility of the parties to the agreement, payment of compensation in case of failure to complete the task on time or at all. The customer can also pay a penalty if, for example, the order was canceled on his initiative.
• The agreement must establish an expiration date and provide a method for changing the provisions.
• Full details of both parties must be present.

If it is necessary to adjust the terms of the GPC contract directly during the execution of the order, an additional form is drawn up, which will become an integral part of the main contract. The supporting document must contain the date of its preparation, as well as the number of the original contract. All adjustments are prescribed in separate paragraphs. Both parties must sign the new addition, otherwise it cannot be considered valid.

Each party retains one copy of the contract and agreement, if it was drawn up later. On the part of the organization, only the signature of the head is not enough; there must be a seal of the legal entity. If the agreement consists of several pages, the parties must sign each one.

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Validity period of the GPC agreement

The agreement has a certain validity period, which is established by the parties and is fixed in a separate clause of the agreement itself. The maximum period is not limited in any way. You can provide for intermediate deadlines if it is acceptable to submit the work in parts. The completed form itself is stored for five years, this is determined by Art. 23 Tax Code and Federal Law dated December 6, 2011 No. 402-FZ.

Can a GPC agreement be reclassified as a labor agreement?

This possibility cannot be excluded, so you should draw up the document extremely carefully, avoiding mistakes that will lead to its recognition as an employment agreement. The relationship between the parties may be recognized as such in the following cases:

• The contract specifies the function of the hired citizen, for example, cleaning the territory; the person himself is called an employee or worker. There should be no cyclical obligations in the GPC agreement. It is one-time and aimed at obtaining a result, not a process.
• Indication of requirements and job descriptions, work schedule.
• Working conditions are provided by the employer.
• Availability of social insurance.

If the agreement turns into a legal relationship under the Labor Code, the employer must draw up an employment contract with a date from the beginning of the civil process. This is regulated by Part 2 of Art. 67 TK. If the document does not meet the requirements and is recognized as a work document, the customer may be fined:

• For 5-10 thousand, if he is an individual entrepreneur.
• From 50 to 100 thousand for legal entities
• From 10 to 20 thousand for officials.

That is why compliance with the exact legal wording and understanding the line between these two types of documents plays an important role.