Treaty on functioning of the European Union (TFEU) defines and regulates the basic freedoms  concerning the functioning of internal market. They are described in detail in title IV TFEU and are the basis of functioning of EU in its present shape. These four freedoms are as follows: freedom of movement of persons, goods, services and capital.

Freedom of movement of services within internal market of EU allowing the provision of cross-border services is defined in Article 56-62 of the TFEU.

 EU legislation enables service provider from one of the EU countries to provide services in the territory of other country without the need to set up economic activity outside the home country.

Article 57 TFEU defines the notion of services. They are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement of goods, capital and persons.

According to this article, services include in particular:

  • activities of an industrial character,
  • activities of a commercial character,
  • activities of craftsman,
  • activities of liberal professions.

The most essential provision of Article 57 TFEU from the perspective of temporary provision of cross-border services in EU is the principle that service provider may, in order to do so, temporarily pursue an economic activity in Member States, under the same conditions as are imposed by that State on its own nationals. It is subject to the provisions concerning the right of establishment

This means that additional restrictions or requirements cannot be imposed on service providers from other Member States. Foreign entrepreneur is treated by national authorities in the same way as a local entrepreneur. Freedom of movement of services exists owing to this regulation

Definitions of temporary provision of service

TFEU does not specify what the concept of temporary service provision is. According to the judicial decisions of the European Court of Justice C-215/01, on the basis of TFEU it is not possible to define what duration of service leads to the fact that it cannot be treated as cross-border provision of services and it should be treated in line with regulations regarding the right of establishment in another Member State.

According to EU legislation cross-border provision of services may take place in the   form of:

  • Self-employment ( service provider has a registered economic activity in one of the Member States and provides services on the basis of contract in another Member State)
  • Posting of employees ( entrepreneur on the basis of contract may post employees to perform a particular service in another Member State)

Note that Member States interpret TFEU regulation differently. Some, e.g. Czech Republic is very liberal and allows for activities in its territory of all registered in EU entrepreneurs without looking into temporary criterion. Other, e.g. Poland assume (it is not a conclusive condition though) that temporary character of provision of services should be no longer than two years.

If you would like to find out more about the conditions of temporary cross-border provision of services in another Member State, please contact the relevant Single Point of Contact. More information can be found in The role of single points of contact.

If you would like to post employees from Poland to another Member State, we will help you.

Read the information in the section Performing work, in particular, get acquainted with the article Posting of employees in the framework of the provision of services. You can also get acquainted with information of National Labour Inspectorate –– Conditions of employment of employees who work on Polish territory posted to work for fixed-term employment by an employer established in a State that is a member of the European Union – publication available in several languages.

The basic right of service providers providing cross-border services

EU legislation guarantees service providers the rights which cannot be restricted by Member States. It has been determined on  the basis of the judicial decisions of the European Court of Justice:

  • it is not possible to require the service provider to establish a seat in the territory of the State where the service is to be provided (C-205/84),
  • it is not allowed to demand that the key personnel live permanently in the State where the service is provided (C-355/98),
  • it is not allowed to require obtaining a permit for providing certain services without taking into account the good performance guarantee already secured in the home country of the service provider, (certain other restrictions may apply to services of special character, e.g. medical services (C-355/98)
  • Polish service providers cannot be required to pay social insurance contributions for their employees in in the country where the service is provided, if such contributions have already been paid in Poland (C-404/98),
  • Requirement to have relevant legal form is not allowed (C-439/99).

If you are a foreigner – EU citizen – and you intend to temporarily provide cross-border services in Poland, read the article Providing of cross-border services in the territory of the Republic of Poland.

Share Print