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Platform work: challenges and solutions

Platform work and EU directives: Challenges and solutions for the self-employed

The attention of EU legislators

The increasing importance of online platforms for the self-employed and freelancers has attracted the attention of EU legislators. The planned EU directives on Platform work raise important questions and present many self-employed people with new challenges. In this article, we highlight the most important aspects and discuss possible solutions.

The importance of platform work in the EU

Definition and examples

Platform work refers to Activitiesthat are brokered and processed via digital platforms. Examples include delivery services, freelance services such as graphic design or copywriting, and transportation services. This form of work offers many advantages, such as flexibility and access to a broader market, but also brings challenges.

Current developments

Platform work has increased significantly in recent years. This is partly due to technological advances and the growing acceptance of digital business models. Platforms such as Uber, Deliveroo and Upwork have fundamentally changed the working environment for many self-employed people.

Stricter regulation of platform work

Data protection regulations (DSGVO)

The General Data Protection Regulation (GDPR) regulates the handling of personal data in the EU. Platforms must ensure that they process their users' data securely and in compliance with the law. This includes transparency in data collection, processing and storage.

Consumer protection guidelines

Platforms that offer services to consumers must comply with the applicable consumer protection laws. This includes clear information about prices, rights and obligations as well as the option to withdraw from contracts.

Labor law and social security regulations

A key issue in platform work is the distinction between self-employment and employment. Self-employed people generally have fewer rights and protection than employees, for example with regard to protection against dismissal and social benefits. New EU directives could provide more clarity and protection here.

Tax laws and reporting obligations

Self-employed persons who work via platforms must pay tax on their income correctly. The platforms themselves may also be subject to tax obligations, such as the collection and payment of Value added tax.

What is planned:

Objectives and intentions of the EU

The EU aims to improve working conditions for platform workers and create fair competitive conditions. This also includes clarifying the status of platform workers and strengthening their rights.

Main features of the new directives

The new guidelines are expected to introduce stricter criteria for distinguishing between self-employed and salaried workers. Platforms could be obliged to offer more transparency regarding remuneration and working conditions and to guarantee certain social benefits for their users.

Challenges for the self-employed

Distinction between self-employed persons and employees

A clear distinction between self-employment and employment is crucial for the rights and obligations of platform workers. Stricter criteria could lead to many platform workers being classified as employees, which can have significant legal and financial implications.

Transparency obligations

Platforms could be obliged to provide detailed information on remuneration and working conditions. This would help the self-employed to make better-informed decisions.

Social benefits for platform users

Another important aspect is the guarantee of certain social benefits for platform users. This could include health and pension insurance, for example, which would increase the financial security of the self-employed.

Obligations of the platforms

Compliance with European laws

Platforms that operate in the EU or provide services for EU member states.Citizens must comply with European laws. This applies in particular to data protection regulations, consumer protection directives, labor law and social security regulations as well as tax laws.

Adjustment of the terms and conditions

With the new EU directives, platforms will have to adapt their terms and conditions. This could mean that they will have to require their users to comply with new standards and offer more transparency.

Tax aspects

Value added tax (VAT) and platform work

The new directives are likely to make it considerably more difficult to avoid VAT. Platforms could be obliged to report or withhold and pay VAT for their users.

Tax transparency and reporting obligations

Increased reporting obligations for platforms regarding the turnover of their users and an automatic exchange of data between platforms and tax authorities are intended to increase tax transparency and make tax evasion more difficult.

Solutions for the self-employed

A good time for self-employed people to take their company into the USA and become independent with your own online presence. Although you have to spend more on advertising and customer acquisition yourself, you save on platform fees and can build your own brand. In addition, the new strict EU laws affect you less if you don't stay on platforms.

Foundation of a LLC in the USA with a real Social contract (Operating Agreement)

One option for the self-employed is to set up a Limited Liability Company (LLC) in the USA. This can offer tax advantages and a more flexible corporate structure.

Creation of your own online store

Having your own online store enables self-employed people to operate independently of platforms and retain control over customer data and payments.

Diversification of revenue sources

Self-employed people can diversify their sources of income by using multiple platforms and building direct customer relationships.

Professional advice

Consulting tax advisors and lawyers who specialize in international business models can help to prepare for the new guidelines and adapt the business structure.


Frequently asked questions (FAQs)

Are platforms obliged to comply with European laws?

Yes, online platforms that operate in the EU or offer services to EU citizens are generally obliged to comply with European laws. This applies in particular to data protection regulations, consumer protection directives, labor law and social security regulations as well as tax laws and reporting obligations.

Will platforms force business people to adapt to new norms?

In all likelihood, yes. The planned EU directives aim to clarify the status of platform workers and grant them more rights. This could lead to stricter criteria for distinguishing between self-employed and salaried workers, increased transparency obligations and the obligation for platforms to guarantee certain social benefits for their users.

Will platform work make it impossible to avoid VAT?

The new directives are expected to make it considerably more difficult to avoid VAT. Platforms could be obliged to fulfill increased reporting obligations regarding the turnover of their users, automatic data exchange with tax authorities and to withhold and pay VAT for their users.

What are possible solutions?

For the self-employed and freelancers affected by the changes, there are various ways to adapt, such as setting up an LLC in the USA, creating your own online store, diversifying your sources of income and seeking professional advice.

How can self-employed people prepare for the new guidelines?

Self-employed persons should find out about the new EU directives at an early stage and adapt their business structure if necessary. Consulting tax advisors and lawyers can help to identify and implement the necessary steps.

What are the advantages of forming an LLC in the USA?

Forming an LLC in the US can offer tax advantages, a more flexible corporate structure and potentially less stringent regulation. However, it is important to consider the complexity of international tax law and potential double taxation issues and to seek thorough tax advice.

Conclusion

The upcoming EU directives on platform work will undoubtedly pose challenges for many self-employed and freelancers. However, they also offer the opportunity to rethink and possibly optimize your own business model. Setting up an LLC in the USA or creating your own online store can be attractive options for gaining more control over your own business activities and potentially benefiting from more favorable tax conditions.

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Disclaimer: Please note that the above dates, tax rates and regulations may change over time. Do not make any independent decisions without first consulting an expert for your individual situation. It is in your interest to always receive individual information from an experienced expert who knows your situation. This information is for informational purposes only and does not promote illegal activities, including tax evasion.

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