Activities in third countries, no longer ignored for social security purposes?

After years of uncertainty, earlier this month a conclusion was published by Advocate General A. Rantos addressing whether activities carried out in third countries should be considered when determining the social security obligations of employees. Employees who work in multiple member states are socially insured in their country of residence based on the EU regulation on social security (883/04), if they perform a substantial part of their work there.

Why is this conclusion important?

If the Court of Justice follows the AG's conclusion, the social security position of employees may change. 

An employee can only be socially insured in one country. Therefore, it is important to determine which country this is in order to pay social security premiums in the correct country. If an employee works in multiple member states, they are socially insured in their country of residence if they perform a substantial part of their work there.

For determining the substantial part, the indicative criteria of working time and/or remuneration are important. In practice, working time is often used. A substantial part is defined as 25%. There is a difference of opinion between member states regarding which days should be considered for determining this substantial part: only the working days performed on the territory of the member states, or also activities outside these territories. 

The Advocate General, based on seven different perspectives, believes that all activities, including those in third countries, should be included. Until now, the Dutch SVB has held a different view, believing that activities in these countries should not be included. If the Court of Justice follows this conclusion, it means that the SVB will have to revise their position, potentially changing the social security position of employees.

If, based on the current view, the working days in third countries have not been considered to determine whether an employee works substantially in the Netherlands, the percentage of work in the Netherlands may decrease when these working days are included, resulting in the employee no longer being socially insured in the Netherlands.

Consequences of the Advocate General's conclusion

Although the conclusion of the Advocate General is not binding, it can influence the final judgment of the Court of Justice of the European Union. We recommend closely monitoring these developments to ensure the social security position of employees is properly arranged.

Need help determining which social security legislation applies to you or your employee(s)? Contact the authors or one of the other members of our People Services team.