3. How to Structure an Independent Contractor Relationship
a. How to Properly Document the Relationship
To adequately justify the relationship of independent contractors, it would be necessary to conclude an agreement.
The contracts made in implementing autonomous professional activity may be written or oral. Each party may require from the other, at any time, the formalization of the contract written. The contract may be concluded for the execution of a work or series of work or to provide one or more services and the time agreed by the parties.
In addition, a worker who wants to register as an independent contractor must follow a few steps required to perform all independent contractors.
First, they have to register with the Tax on Economic Activities (IAE), as long as it is not exempt, within ten working days before the start of the activity. The Business Tax or I.A.E. is a tribute to local character, which taxes the exercise of business, professional or artistic exercised or not locally. It is mandatory for every company, business or professional.
Since January 2003, individuals and corporations are exempt from this tax, which have a net turnover of less than 1,000,000€. However, it is still mandatory to register on the tax.
For such processes, they must go to the tax authorities or the city council, and fill in the form 845 (for activities subject to quota municipal), the 846 and 850 (for the activities subject to provincial share) or 846 and 851 (for activities subject to national quota), and select the heading that corresponds to their business.
Once discharged from the IAE, the worker shall have a period of 30 calendar days from the start of the activity to register as self-employed in the administration of the Social Security Treasury.
Secondly, it would be necessary to apply to become a member of the Special Regime of Social Security for Workers Independent contractors (RETA), within 30 calendar days of the start of the activity.
The document to become a member of the Special Regime of Social Security of these workers, as well as general data, must contain those related to his business or occupa-tion, and peculiarities regarding contributions and protective action.
The registration request is presented at the Provincial Administration of the Social Se-curity or at the one which boundaries the establishment or, failing that, where he is domiciled.
The application to become a member of the Social Security, as the contribution, is unique, even if the worker develops several activities leading to their inclusion in the scheme. In these cases, if the employee elects to invoke the coverage of industrial accidents and occupational diseases, coverage for such contingencies is practiced by the activity that is applicable to the highest contribution rate among those included in the current premium rates. To this end, workers must make a statement of its activities to the Social Security Treasury in the application to become a membership.
Thirdly, you will need to register for census and taxation and choose accordingly. Thus, the employee must complete form 036 in which you opt for the relevant tax regime and indicate the activity that is to be performed and the data of the company, in addition to applying for an identification tax number (TIN). This process will have to be completed in any administration of the tax.
b. Day-to-Day Management of the Relationship
An independent contractor is an individual who routinely, personally, directly, on their own and outside the scope of management and organization of another person, performs a business or a professional activity for profit, whether or not he provides occupation for employees.
The independent contractor organizes his work without being subjected to a timetable, so that there is no subordination to the company. Moreover, he can work for one company or for several, but usually works for several.
Thus, the independent contractor does not receive instructions about how he has to do his job, in that, he is not subjected to the orders and directives of the company, since he can decide what work he wants to do and what he does not.
Finally, he perceives benefits for the service provided through bills, which may or may not be the same amount each month.