How to set up a translator business - step by step
Translations are an inseparable part of the activities of many companies. They may turn out to be necessary in cooperation with a foreign company or its representative office. It is very important that the translations are of a high standard. This allows you to build not only a professional image of the company, but also to avoid unpleasantness due to translation errors. In order for the translation effect to be as good as possible, many companies decide to use the services of an interpreter. Perhaps this type of business is an idea for your own business? How to set up a translator business? We suggest below.
General characteristics of the translator's activity
In order to be able to translate, you must have a very good knowledge of foreign languages. People with this skill, as part of their business, may, for example, cooperate with foreign companies or translate foreign literature into Polish. A special type of translator's activity is a sworn translator. The rights of a sworn translator are regulated by the Act of 25 November 2004 on the Profession of Sworn Translator.
A sworn translator has the right, inter alia, to to prepare and certify translations from a foreign language into Polish and from Polish into a foreign language. However, it is not allowed to translate directly from one foreign language to another. Pursuant to the regulations, a sworn translator must first translate the document into Polish, and only then into another foreign language. The powers of a sworn translator also include the preparation of certified copies of letters in a foreign language and the checking and certification of letters prepared by other persons. In the case of certifying a letter prepared by other persons, the responsibility for their accuracy is transferred to a sworn translator.
A sworn translator has the right to interpret - consecutive, simultaneous and a vista interpreting. The main issue that distinguishes sworn translators from other translators is the fact that a sworn translator may also perform these activities in the field of court and administrative proceedings, pleadings and official documents.
Preliminary requirements related to running the translator's business
For most translators, there are no legal requirements related to the verification of skills or a specific way of registering a business.
The exception to the rule is the status of a sworn translator.
A natural person who meets certain requirements may be a sworn translator. To be able to obtain the status of a sworn translator:
have Polish citizenship or the citizenship of one of the EU or EFTA member states - parties to the agreement on the European Economic Area, the Swiss Confederation or, on the basis of reciprocity, citizenship of another state,
know the Polish language,
have full legal capacity,
complete university studies - at the same time obtaining a master's degree or equivalent in one of the above-mentioned countries (in any field - under the deregulation act in 2011, the requirement to complete philological studies or postgraduate studies in translation was abolished)
pass the exam in translating skills from Polish into, foreign and from a foreign language into Polish.
Additionally, a person applying for the status of a sworn translator may not be punished for an intentional crime, tax offense or unintentional crime against the security of economic transactions.
Acceptable forms of translator's business
As a rule, the work of an interpreter can be practically carried out in any form. Therefore, the taxpayer can choose: sole proprietorship, partnership, general partnership, limited partnership, limited joint-stock partnership, limited liability company. or a joint stock company. In the case of sworn translators, it is also possible to choose a partner company.
The translator may also perform activities on the basis of civil law contracts, which allow to treat the activity as an activity carried out in person.
How to set up a translator business?
If a translator is starting a sole proprietorship or a civil partnership, the company must be registered in CEIDG, and if one of the other forms of business is chosen, the company must be registered in the National Court Register.
In the case of a sworn translator, the right to practice is achieved after taking an oath and entering on the list of sworn translators.
As a rule, a person running a business who intends to sell services subject to VAT taxation must submit a VAT-R form no later than the day preceding the commencement of the sale. The form is used to register the entrepreneur as an active or exempt taxpayer of value added tax. The completed form should be delivered to the tax office competent for the place of business.
PKD term for translator
The basic PKD for the translator's activity is:
7430Z - translation activities.
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The best form of taxation for a translator
If the translator's activity is carried out in the form of a legal partnership (LLC, joint-stock company) or a limited joint-stock partnership, the enterprise automatically becomes a CIT taxpayer.
If, on the other hand, the services of an interpreter are provided in the form of a sole proprietorship or as a partnership, the taxpayer can choose between taxation according to general rules or flat tax. When providing translator services as part of business activities for other companies, there is no possibility of choosing a lump sum on recorded revenues. A lump sum (20%) is due for a translator defined as a freelance profession, who provides services only to private persons.
General rules may be profitable when the taxpayer does not expect to exceed the first threshold of the scale - PLN 85,528 of income. In the case of taxation according to the scale, it is possible to take advantage of many reliefs, which cannot be used by a flat taxpayer (e.g. pro-family relief or joint settlement with a spouse). However, if the expected income from translations may significantly exceed PLN 85,528, it is worth considering a flat tax, in which the income is taxed at a fixed rate of 19%.
Translator with or without VAT
When commencing an activity consisting in the provision of translation services, the taxpayer has the right to decide whether he or she wants to become an active VAT payer right away, or whether he or she prefers to exercise the right to a subjective exemption.
It would seem that in the case of the translator's activity it is worth taking advantage of this exemption due to the fact that the nature of the activity in most cases does not generate significant expenses from which the taxpayer could deduct VAT. However, if a taxpayer plans to make a large amount of purchases for business purposes, e.g. the necessary literature or arrange the company's headquarters, it may turn out to be more profitable to be a VAT taxpayer.
An important aspect is also the fact that most orders are accepted from other companies that also want to be able to deduct VAT.If the company has a choice of using the services of an interpreter at the same price, who is a VAT payer as part of his business and will certainly use the first option that will allow you to deduct VAT from the expenses incurred.
Whether it is worth being a VAT payer or not depends primarily on the company's development plans and customer relations.
Translator's ZUS contributions
A translator running a business in the form of a sole proprietorship, sole proprietorship limited liability company. or being a partner in a civil law partnership, general partnership, limited partnership or partnership, is obliged to register himself for insurance with the Social Insurance Institution.
The monthly ZUS contribution for a self-employed person who additionally pays for voluntary sickness insurance amounts to PLN 1,121.52 (including the contribution to the Labor Fund). On the other hand, the sum of contributions without voluntary sickness insurance (with contributions to the Labor Fund) currently amounts to PLN 1,061.91.
It is worth noting, however, that people who start a sole proprietorship in the first 24 months are entitled to take advantage of the preferential ZUS rates. The ZUS preferential rates currently amount to PLN 465.28 (social and health insurance). An additional convenience is the fact that people benefiting from preferential ZUS rates are not obliged to pay the Labor Fund (PLN 59.61).
Contributions for individual types of insurance calculated for themselves by a person running a translator's business in one of the above-mentioned form is required to settle in the settlement declaration (ZUS DRA form).
Running a business in the form of a multi-person limited liability company, limited joint-stock or joint-stock company does not constitute title to any insurance with the Social Insurance Institution. However, these companies are contribution payers in the case of employing employees.
Business account for a translator
As a rule, the provisions do not explicitly indicate the obligation for an entrepreneur to have a separate company account.
It is true that making or receiving payments related to the business activity performed should take place via the entrepreneur's bank account, whenever:
a party to the transaction from which the payment results is another entrepreneur and
the one-off transaction value, regardless of the number of payments resulting therefrom, exceeds the equivalent of EUR 15,000 converted into zlotys at the average exchange rate of foreign currencies announced by the National Bank of Poland on the last day of the month preceding the month in which the transaction was made.
However, these payments can also be made through the trader's personal account. It is important that its owner is only an entrepreneur (it is impossible to use a joint account for spouses). Therefore, in the case of an interpreter's activity, setting up a separate bank account is not a necessity.
What housing conditions for the translator
There are no top-down guidelines on where and under what conditions the translator should work. If the above-mentioned factors are not regulated, e.g. by an agreement with the client, the translator can work in the comfort of his own apartment or even sipping coffee in a cafe. At the beginning of the business, the translator does not need much - all you need is an average computer and Internet access.
Marketing in the translator's activity
A good idea when starting a translator business is to create your own website where all the services you offer will be listed. Nowadays, a large group of people looking for a service provider of this type do it on the Internet. It is also worth boasting about your previous experience and the obtained certificates confirming the qualifications - this will certainly strengthen the trust of new customers.