Marginal part-time work as employee in another country does not impact a self-employed person’s affiliation to his or her social security benefit scheme

‹ Back to the articles

PwC-skatteradgivning-Group-outline_0002_burgundy.pngThe EU Court has determined that marginal part-time work activities executed in the form of employment in another country by a self-employed person do not impact the affiliation of that individual in terms of incurring social security benefits. This applies to individuals who are self-employed within the EU/EEA and who work less than 5 percent of total normal working hours as an employee in another country.

Within the EU/EEA it is Regulation (EC) 883/2004 and associated application rules in (EC) 987/2009 which determine the country in which an individual is to incur social security benefits. According to the Regulation, an individual can incur social security benefits in only one country at a time. Social security contributions are to be paid in the country in which the individual incurs social security benefits.

In the case an individual executes work as an employee in a country and is self-employed in another country, that individual is to be seen to incur social security benefits in the country in which he or she is employed. An example is the case in which an individual resides in Denmark and is self-employed there, but is, also and at the same time, employed in Sweden and executes work in Sweden. Such an individual is to be seen to incur social security benefits in Sweden as the location of employment determines where he or she is to be seen to be insured. This implies that the individual, in this case, is to pay Swedish social security contributions on his or her income earned from work activities undertaken in Denmark as a self-employed person.

In the decision C-89/16 (Szoja), the EU Court concluded that one should not apply the Regulation to marginal employment, that is, employment equivalent to less than 5 percent of an employee’s normal working time. If the individual’s work in Sweden, as applied to the above-mentioned case, is less than 5 percent of total working hours, the individual is not considered to be employed and, consequently, incurs social security benefits in Denmark where they are self-employed. Social security contributions for work activities are, then, to be paid only in Denmark, that is, they are also to be paid in Denmark for the income from employment in Sweden. That marginal employment is not to be considered has been stipulated in the application rules when it comes to working as an employee in two, or a number, of countries. Now, the EU Court has determined that this is also to apply when an individual works as an employee in only one country and is self-employed in another country.

Remember that the rules regarding affiliation to national social security systems can be complicated when work activities are executed in a number of different countries. It is, therefore, important to determine what applies in each, individual case.

Do you have any questions on individual taxation?

Cecilia Arrhenius

Cecilia Arrhenius

Cecilia Arrhenius arbetar på PwC:s skatteavdelning i Malmö med internationell personbeskattning och socialförsäkring.
010-212 67 46
Cecilia Arrhenius works with international personal taxation and social insurance at PwC’s tax department in Malmö.
+46 10 212 67 46

Leave a comment

Related articles

Read the article

No change in social security coverage for Öresund commuters

Commuters in the Öresund region can work from home without having to worry about a change of social security coverage. Försäkringskassan ...

Read the article
Read the article

New report: Tax measures in response to COVID-19

Governments around the world are introducing tax measures to support companies who are financially affected by covid-19. In an extensive ...

Read the article
Read the article

300 billion in the government's covid-19 action package

The Swedish Government has presented a package of measures aimed at mitigating the economic effects of the ongoing spread of covid-19. The ...

Read the article