COVID and working cross-border - Update April 2022
07/04/22
In 2020 agreements were made to mitigate the tax and social security consequences for frontier workers who had to work from home due to the COVID-19 pandemic. These agreements were in place until 31 December 2021 and were then extended.
The extension of these tax measures for frontier workers had been laid down in the new mutual agreements between the Netherlands - Belgium and the Netherlands-Germany (Dutch text). These measures were in force until 31 March 2022.
The European Commission has also recommended Member States to continue the approach to disregard a temporary different work pattern for cross-border workers until 30 June 2022.
Update 1 April 2022:
The mutual agreements between the Netherlands and Belgium and the Netherlands and Germany have again been extended up until 30 June 2022. In the official publications regardings the extensions, it was mentioned that this would be the final extension for both the agreement with Belgium and the agreement with Germany.
The Dutch, Belgian and German authorities have confirmed that they will follow this recommendation, and it is expected that the other Member States will do the same. This means that the social security position of international employees in the EU, EEA or Switzerland, who temporarily have to work (from home) in another country due to the COVID-19 measures, will remain unchanged.
Furthermore, in the coming months the Member States are examining whether working from home can be facilitated in a structural manner for frontier workers. Further developments are expected following this investigation.
What does this mean for you?
The extension of the agreements is of importance for frontier workers who, due to the COVID-19 measures, work in a different country than normal. For these employees, it has to be reviewed per case what the influence of working from home will be for their tax and/or social security position.
There are various situations in which the COVID-19 measures could have influence on your cross-border employees. For instance, an employee living abroad and working in the Netherlands for a Dutch employer may now be working from home; or an employee may be sick at home; or an employee may not be able to work at all as the work has been temporarily postponed.
Frontier workers can make a decision regarding their tax position when they file their individual income tax return for the years 2020 and 2021. With the extension of the mutual agreements, a similar decision will be made when filing the income tax return 2022.
You can read more about the consequences and points of attention regarding these decisions in our previous article, which can be found here.
Are you curious about the consequences for your employee(s)? Or would you like to know more about how we can support you? If so, please contact your PwC-advisor.
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