Ruling description

Companies should register with the Social Security Office (ZUS) management board members they have management contracts with, even if they are performing the contract as self-employed entrepreneurs. The Supreme Court ruled on November 12, 2014 (I UK 126/14) that members of the management board of companies who have management contracts should be registered with the ZUS as contractors, whether or not they have made the said contracts as individuals or self-employed entrepreneurs.  In such a case, the company hiring them is the remitter.

The case related to management board members who have registered as self-employed and made management contracts with the company within the scope of self- employment. There has been an ongoing dispute in jurisprudence for some time as to whether income under a management contract in such a situation should be subject to contributions as part of the income generated under self-employment (contributions paid individually by the entrepreneurs on the declared tax base) or on the terms applicable to contributions paid on activities performed personally, i.e. under mandate agreements (contributions are paid by the company as the remitter of contributions on the actual amount of income). The ZUS was of the view that that management contracts should be subject to contributions on similar terms to those applicable to activities performed personally. The attitude of the ZUS was questioned by the courts (e.g. Supreme Court ruling of December 9, 2008, case ref. no. I UK 138/08 and of June 23, 2009, case ref. no. III UK 24/09).

The Supreme Court ruling in question marks a change in the existing line of interpretation of the courts, as the Supreme Court has now endorsed the arguments of the ZUS according to which management board members cooperating with the company under management contracts perform their duties personally rather than acting at their own risk, i.e. they should not be subject to ZUS contributions as self-employed entrepreneurs.


The Supreme Court ruling gives rise to material concerns. We believe there are no clear grounds in law whereby one should accept the aforementioned classification of management contracts against the background of the provisions on social security. One should point out that – contrary to the provisions on personal income tax – the provisions relating to social security do not include a clear dictate to denote an entrepreneur providing management services as equal to a person performing activities personally. Hence, the Supreme Court applied an expansive interpretation, most likely based on teleological premises (the ruling has yet to be published in full), and not on the express wording of provisions of law. Despite the said doubts, the Supreme Court ruling potentially opens up the possibility for the ZUS to recover overdue social security contributions from entrepreneurs for the time prescription period. Thus, we recommend that companies consider both (i) changing their attitude and withholding social security contributions on management contracts  in the future, and (ii) reviewing the past settlement of accounts and assessing the level of risk.