On June 14, 2022, the EU Administrative Commission (“the Commission”) agreed to extend the “no-impact policy” for social security for frontier workers until the end of 2022. This means that workers who work from home more than 25% of time due to COVID-19 restriction measures will not incur a change in social security until the end of 2022.
Background
A "no-impact" policy in social security was introduced during the global lockdown related to the coronavirus pandemic to avoid changes to applicable social security laws for cross-border workers who were forced/advised to stay and work at home to prevent spread of the COVID-19 virus. The “no-impact” policy was originally was set to expire at the end June 2022. (Also see our previous update.)
The recent decision to extend the advice to ignore changes in work patterns resulting from the COVID-19 restriction measures when determining the applicable social security legislation until the end of the year was made in view of the upcoming summer holidays and an expected increase of COVID-19 in the autumn. This means that changes in work patterns resulting from the COVID-19 restriction measures, do not affect the applicable social security legislation.
Although decisions from the Commission are not legally binding, they are generally adopted by Member States. Meanwhile the Dutch SVB and the German DKVA have updated their official policy accordingly. We expect other Member States will do so as well.
Tax
We note that the above decision does not involve taxes. Working from home will still impact the taxation of the remuneration of the employees involved unless new bilateral agreements are concluded.
