[bonobo]

And this complexity doesn't end there because, in order to deal with these heavy employee taxes, it's not uncommon for IT companies to ask employees to open their own one-man companies to avoid these taxes. Now having a B2B relation, the company is free from these taxes and mandatory benefits, and the employee now deals with it declaring himself as the only employee and paying himself minimum wage on paper, receiving the rest of his salary as company's profit. Or the scheme they call flex, which is to pay a great deal of the salary as extras (even up to 80%) because these do not get taxed. The employee, in turn, needs to declare expenditures to his contractor in order to receive this extra share.

The real meaning of "being smart enough with your accounting" seems to me mostly finding these loopholes in the tax structure to avoid leaking money to the government.