Frontier workers will be able to telework until 31 December 2022 without any impact on the applicable social security system. This was decided by Belgium and its neighbouring countries following a decision by the Administrative Commission for the coordination of social security systems. Nevertheless, there are some important differences in this transitional period compared to the neutralisation that was in place during the pandemic. Here we outline the existing principles and what this neutralisation means for you.
Principle
Within the EU, the EEA and Switzerland, the principle is that an employee is only subject to the social security legislation of one Member State. That is usually the legislation of the country in which one works. This follows from the application of Regulation 883/2004.
However, in the event of simultaneous employment in two or more Member States, the employee is subject to the social security legislation of his/her country of residence if he/she performs a substantial part of his/her work there. According to the European Commission’s Practical Guide, the indication is that at least 25% of an employee’s working time is spent and/or at least 25% of his/her salary is earned in the country of residence.
This means, among other things, that teleworking may have an (unwanted) impact on the applicable social security legislation.
Neutralisation during the pandemic
As a consequence of the pandemic, many frontier workers were forced to telework (at least partially) from their place of residence. The Administrative Commission for the coordination of social security systems then decided to neutralise the effects of teleworking. This measure was applied to all employees who teleworked abroad, whether or not they were frontier workers. The tax consequences of teleworking abroad were also neutralised. This regulation came to an end on 30 June 2022, as regards both the social security and the tax aspects.
Prolongation for frontier workers
On 14 June 2022, the Administrative Commission decided to further neutralise the social security consequences of teleworking for frontier workers until 31 December 2022. This measure applies to existing and new teleworking situations. The measure applies automatically; there are no formalities.
Please note:
- This neutralisation applies only to frontier workers, and is therefore more restrictive than the neutralisation until 30 June 2022, which also applied to teleworking in another EU Member State that is not a neighbouring country;
- The neutralisation applies only to determining the applicable social security legislation, and not for the Limosa declaration obligation and tax legislation, as was previously the case.
Thus, frontier workers will be able to telework until 31 December 2022 without any impact on the applicable social security system. Since this is a non-binding decision of the Administrative Commission, it is subject to confirmation by the individual Member States. The Belgian National Social Security Office has already announced in an official communication that it will apply the system during the transitional period. The competent authorities of France, Luxembourg, the Netherlands and Germany have also confirmed that they will do the same.
This transitional period will allow the Administrative Commission to further evaluate the impact of teleworking on the social security coordination regulations and to develop structural measures.
It remains to be seen whether a similar tax measure will be introduced. That would certainly be desirable.
