Charging of management contracts

Publication / 28.04.2017

In a judgment dated March 29, 2017, in case ref. no. I UK 116/16, the Supreme Court ruled that persons performing activities under managerial contracts, who at the same time carry out business activities and pay contributions in connection with these activities, are not obliged to pay contributions to the Social Security for a managerial contact.

The Supreme Court, referring to the resolution of November 12, 2014, pointed out that the obligation to pay insurance under a civil law contract applies only to members of the management boards of companies, who always act in the name of the company, while the manager acts independently. Moreover, the Supreme Court stressed that compulsory insurance coverage under a business activity instead of a contract is also possible when the activity is performed for a single entity.

The aforementioned ruling thus challenges the previous practice of the Social Security Administration to deny the controllers’ choice of insurance from business activity, even when the manager paid lower premiums from this very title.