Modified social security
Simultaneous employment in multiple EU countries
Modified social security position
Marc Verbeek
24/09/2018
Modified social security
Simultaneous employment in multiple EU countries

A while ago, the social security authorities changed their position regarding the applicable internal social security rules in case of simultaneous employment in different countries (administrative decision of December 21, 2017). 

What is it all about?

To determine the applicable social security system within the EU, EU regulation 883/2004 must be consulted.

Basic principle is that one can only be subject to the social security system of one country.

In case of simultaneous employment in different countries, the regulation foresees rules to determine which country can levy social security contributions on the total remuneration package.  These rules have not changed.

Once it has been determined which country is competent, it further needs to be determined which scheme is applicable to  the person concerned i.e. the social security scheme for employed persons or the scheme for self-employed persons.  This is where the change takes place.

Current and modified position

In case Belgium is the competent country and can therefore also levy social security contributions on the foreign earned income, it currently follows the qualification of that income in the other country.   In a number of countries (f.e. the Netherlands, France, Denmark, … ), a person exercising a mandate as director, is considered to be an employee.  Therefore, when subject to the Belgian social security scheme, Belgian employee’s social security contributions are due on this income.

In the modified position, Belgium will no longer follow the qualification of the other country but apply its own qualification meaning that the income will be considered to be a self-employed income and social security contributions as a self-employed person will apply. 

Situations affected

In practice, the new position will affect the following situations:

  1. Persons now working as director in different countries
    Example: a person is working as director in Belgium, the Netherlands and France:
    Current situation: subject to Belgian social security contributions as self-employed person on the Belgian remuneration and subject to employee’s social security contributions on the Dutch and French remuneration.
    Future: all remunerations will be subject to the self-employed scheme.
  2. Persons working in Belgium as employee and as director in another country
    Example: a person is working as an employee in Belgium and as director in The Netherlands:
    Current situation: all remunerations are subject to Belgian employee’s social security contributions.
    Future: the employee’s salary will be subject to Belgian employee’s scheme while the Dutch remuneration will be subject to contributions as a self-employed person.
    In practice the person concerned must affiliate with a social security fund for independents.


Entry into force

Although the administrative decision was taken on December 21, 2017, it is still not clear yet as from when the changes will actually take effect. 

Conclusion

The switch from employee’s social security contributions to contributions as self-employed person will in most cases probably lead to a reduction of the amount of contributions to pay and no more employer’s contributions will be due. 

For those who currently already are subject to Belgian contributions as self-employed,  the transition will go smoothly and no administrative formalities need to be fulfilled.  Only the amount of the contributions will need be adjusted so as to include the foreign remunerations. 

For those who currently are only subject to Belgian employee’s contributions, an affiliation with a social security fund for independents will be necessary.   

Marc Verbeek
Marc Verbeek
Tax Consultant
Crowe Spark