International employment : End of transitional period Regulation (EC) 883/2004 – possible change of applicable social security regime as from 1 May 2020

On 1 May 2010, Regulation (EC) 883/2004 on the coordination of social security systems entered into force with respect to the EU Member States. However, a transitional measure was foreseen for a period of 10 years. This measure expires with regard to the EU Member States on 30 April 2020. From 1 May 2020, the ‘new’ Regulation (EC) 883/2004 will be fully applicable, including to those who under the transitional measure were still covered by the ‘old’ Regulation (EEC) 1408/71. This may have a significant impact on the applicable social security in the event of simultaneous employment in several Member States.

The ‘new’ Regulation (EC) 883/2004 has introduced a number of important changes in the event of simultaneous employment in various Member States, including:

• Simultaneous employment as a worker in various Member States: in order to be subject to the social security of the Member State of residence, Regulation (EEC) 1408/71 required the worker to perform only a ‘part’ in the Member State of residence, while under Regulation (EC) 883/2004, the worker must work there a ‘substantial part’, i.e. 25% of his working time or remuneration. As a result, it was often sufficient to work only one day per month on average in the Member State of residence to be subject to the social security regime of the Member State of residence.
• Simultaneous employment as employee and as self-employed person in various Member States: under Regulation (EEC) 1408/71, persons employed in one Member State as an employed person and in another Member State as a self-employed person (e.g., a director in Belgium) could be subject to the social security regime in each Member State for the activity concerned (‘split’) if the self-employed activity was pursued in a country listed in Annex VII to Regulation (EEC) 1408/71. This also included the exercise of a self-employed activity in Belgium. Regulation (EC) 883/2004 abolished this Annex VII, so that workers who are also self-employed in another Member State are also subject to the social security regime of the Member State competent for the employee’s activities.
• International transport: under Regulation (EEC) 1408/71, specific rules applied for international transport which were abolished by Regulation (EC) 883/2004.

Regulation (EC) 883/2004 provides for a transitional measure for persons who under Regulation (EC) 883/2004 would be subject to the social security regime of a Member State other than the regime to which they were subject under Regulation (EEC) 1408/71 on 1 May 2010. These persons could continue to be subject to the social security regime applicable to them before 1 May 2010 for a period of 10 years if their situation remained unchanged and if they had not themselves requested the application of the ‘new’ Regulation (EC) 883/2004. This transitional measure applies only for a maximum period of 10 years.

As regards EU Member States, this transitional measure therefore expires on 30 April 2020. For third-country nationals, it will only end on 31 December 2020 and for some countries where Regulation 883/2004 only entered into force later, it will remain in force for a certain period. This concerns Switzerland (until 30 March 2022), Iceland, Liechtenstein and Norway (until 31 May 2022).

It is therefore possible that, as a result of the expiry of the transitional measure, some employees or self-employed persons will be subject to the social security regime of another EU Member State from 1 May 2020. This may be the case, for example, for those who combine a directorship in a Belgian company with an activity as an employee in another Member State, unchanged since before 1 May 2010.

Key message

Take into account that for some persons who have already been working simultaneously in various Member States without change since before 1 May 2010, the applicable social security regime may change as from 1 May 2020.