Translation of a B2B contract for IT specialists – the key role of English version and the impact on taxes

Increasingly more Polish specialists from IT industry enters into contracts with foreign companies. These projects give attractive professional development prospects, financial benefits, opportunities to work for companies from around the world and all of this without necessity to move around. Additionally, a B2B contract drawn up in English and concluded with a foreign entity has an impact on taxes to be paid. Dear IT specialists, let us see into the aspects of value-added tax (VAT) and why is it worth ordering a certified translation of this document.

Why a contract in English?

Contracts concluded by Polish IT specialists with foreign customers are usually written in English, the lingua franca of the business world and technology commonly understood by entrepreneurs worldwide. Each B2B contract from IT sector (among others Consulting Agreement, Independent Contractor Agreement, or Service Contract) is adjusted to international standards and terminology which ensures clarity and precision in terms of legal and business aspects. Therefore, in case of working for foreign entities in IT industry, a contract translation into English is an unwritten standard.

The impact of international contract in IT sector on VAT

In case of customers from Poland, VAT must be added to net amount on invoice. However, in case of foreign entities, according to general principle, the place of providing service is determined by a client’s seat. Therefore, if you provide a service for a client from the USA or the UK, VAT is not obligatory in Poland. You invoice net amount and your customer is responsible for local taxation of the service pursuant to provisions of his/her country. It seems that VAT can be avoided in case of IT specialists working on international level. It is worth remembering that if you plan to provide services for a customer from the European Union, you must register as a payer of EU VAT before issuing first invoice. It is an important aspect even though registration procedure is not complicated. For the avoidance of doubt, consult your accountant.

Certified translation or translating on your own?

Customers frequently ask whether a certified translation of a b2b contract is always necessary. In situations when a contract must be presented before tax authorities or courts, a certified translation is indispensable because it carries legal significance.

Even, if it is not officially required, it is worth entrusting a sworn translator with your contract translation. The Office of the Sworn Translator and Interpreter of the English Language Jacek Kasprzyk provides reliable contract translation services because sworn translators and interpreters are specialists with statutorily regulated profession whose professional liability guarantees the quality of their services. They are entered on the List of Sworn Translators and Interpreters kept by the Ministry of Justice and frequently have vast knowledge regarding both, the legal language and law. In case of translating contracts from IT sector, their knowledge of industry-specific terminology and legal aspects is extremely valuable.

When sworn translations are not required, some people try to use tools such as Google Translate or online machine IT translator. Unfortunately, it is a risky approach. Machine translations can help to understand general contents but are not sufficiently accurate and precise in relation to legal context. Moving a comma or a full stop to a wrong place can change the meaning of the entire sentence which is unacceptable in official documents such as b2b contract. Therefore, it is always a good idea to visit the Office of Sworn Translations, especially when it comes to business and legal contracts.

Source: Freepik