June 29, 2023
European Union's framework agreement on social security for cross border telework comes into force as of 1 July
The Framework Agreement concerning cross border telework within the EU/EEA/Switzerland will come into force from 1 July 2023. This agreement is relevant for cross border commuters who regularly telework in their residence country. Under this new agreement they can remain socially insured in the country where their employer is situated, while working below 50% in their residence country and the other part (the majority) in the employer country. This ensures that the amount of time an employee can work in their country of residence increases, without creating social security obligations in that country for the employer. A welcome measure, but only in limited situations, as specific conditions must be satisfied. There will be new employer requirements in terms of obtaining A1 certification.
A Tax Alert prepared by EY's People Advisory Services group, and attached below, provides additional details.
Full text of Tax Alert 2023-1159