When an employee of a Dutch employer works partly from home in another EU country, three questions arise that each have their own answer: social security, employment law and tax. Social security stays Dutch as long as less than 25% of the work is done in the country of residence; the EU Framework Agreement on cross-border telework can keep it Dutch up to just under 50%, but only on a joint request to the Sociale Verzekeringsbank (SVB).
Below we set out how to work through the questions in the right order, what the Framework Agreement does and does not solve, and what an employer should have on file before saying yes.
Table of contents
Which three questions does cross-border remote work raise?
Social security, employment law and tax are governed by different instruments and decided independently, so each can point to a different country:
- Which country’s social security system covers the employee? In principle exactly one.
- Which country’s employment law governs the relationship? A chosen law can apply while another country’s mandatory rules override parts of it.
- Where is the employee taxed, and does the employer acquire a taxable presence abroad?
An employee living in Belgium, employed by a Dutch company and working three days from home and two in Eindhoven, can end up insured in the Netherlands, protected by Belgian mandatory employment law and taxed partly in each country. Our overview of cross-border employment law sets out how those layers interact.
| Question | Instrument that answers it | Primary connecting factor |
|---|---|---|
| Social security | Regulation 883/2004 and Regulation 987/2009; the Framework Agreement on cross-border telework | Place of work; residence where a substantial part of the work is done there |
| Employment law | Rome I (Regulation 593/2008); Posting of Workers Directive 96/71/EC as amended | Chosen law, floored by the mandatory rules of the country where work is habitually carried out |
| Tax (employee) | The applicable bilateral tax treaty | Residence, plus where the work is physically performed |
| Tax (employer) | The permanent establishment article of the applicable treaty | Whether a fixed place of business or dependent agent arises abroad |
Which country’s social security applies?
Within the EU, the EEA and Switzerland, Regulation 883/2004 allocates each worker to the system of a single state (Article 11). The default rule is that you are insured where you actually work, irrespective of where you live or where your employer is established.
When an employee works in two or more states, Article 13 of Regulation 883/2004 applies: the test is whether a substantial part of the work is done in the state of residence. Under Article 14 of Regulation 987/2009 that threshold is 25% of working time or remuneration, assessed over the next twelve months.
- Below 25% in the state of residence: the employee remains insured where the employer has its registered office, so Dutch social security continues.
- At or above 25%: the state of residence becomes competent, and the Dutch employer must register and pay contributions there at that country’s rates.
One extra home-working day a week can therefore move an employee out of Dutch social security altogether, with consequences for pension accrual, sickness cover and the contribution bill.
What does the EU Framework Agreement on cross-border telework change?
The Framework Agreement, applied since 1 July 2023 under Article 16 of Regulation 883/2004, softens that cliff edge. An employee who habitually teleworks from the state of residence can remain insured in the employer’s state, provided cross-border telework is less than 50% of total working time. In practice the agreement covers the band between 25% and 50%.
- Both states must be signatories. According to the Belgian social security authority, 23 states have signed, including the Netherlands, Belgium, Germany, France, Poland and Spain; Denmark, Greece, Hungary and Romania have not, and the United Kingdom has declined. Check the current list before each new arrangement.
- It is not automatic. Employer and employee must jointly submit a request to the competent institution of the state whose legislation is sought; for a Dutch employer that is the SVB. Without a request, the ordinary 25% rule applies.
- It results in an A1 certificate, the document a foreign inspectorate asks for and the only practical proof of the arrangement.
- It covers telework only: work from home using IT to stay connected to the employer, not client visits, site work or sales activity in the state of residence.
A late request is not automatically lost, as the SVB can accept a request with limited retroactive effect where contributions were in fact paid in the Netherlands. Treat a gap found in a payroll review as urgent and confirm the window with the SVB.
What if the Framework Agreement does not apply?
If either state has not signed, the remote work reaches 50%, or there is non-telework activity in the state of residence, the ordinary rules apply. Once 25% is crossed, the employee is insured there and the Dutch employer must register as a foreign employer and pay contributions locally.
An individual exception can still be sought under Article 16 of Regulation 883/2004, but both states must agree and the procedure is slow. Outside the EU, EEA and Switzerland a bilateral social security treaty may apply; where none exists, dual insurance or a gap in cover is realistic.
Which employment law applies to a remote worker abroad?
Social security tells you nothing about the applicable employment law; that is decided by the Rome I Regulation. Under Article 3 Rome I the parties may choose the governing law, and most Dutch contracts choose Dutch law.
Article 8 Rome I limits that choice: it cannot deprive the employee of the mandatory protection of the law of the country in which, or from which, the employee habitually works. Article 9 adds the overriding mandatory provisions of the forum; we explain this in our article on where party autonomy meets mandatory law.
An employee who performs most of the work from a home in another Member State may be habitually working there. A Dutch employer that follows the UWV or subdistrict court route may then still fall short of that country’s notice, severance or procedural rules for dismissal. There is no percentage test here: “habitually” is a qualitative assessment of where the centre of gravity of the work lies.
When does remote work become posting?
Under Article 1 of the Posting of Workers Directive 96/71/EC, posting requires a transnational provision of services: work for a recipient in the other state, at a group company there, or through hiring-out. Article 3, as extended by Directive 2018/957, then imposes the host state’s core terms on pay, working time, holiday and safety.
Pure telework from the employee’s own home for the employer’s own account is not normally posting. Once the employee works on site at a client, is placed with a group company or is made available to another undertaking, the host state’s posting regime applies, including its notification obligation under Directive 2014/67/EU; in the Netherlands that is the WagwEU notification.
What are the tax risks for the employer?
The largest exposure is that a home workplace abroad may form a permanent establishment of the employer under the applicable tax treaty. The test is whether the home office is at the employer’s disposal and used regularly for the business, and whether the employee habitually concludes contracts as a dependent agent; a permanent establishment brings corporate tax filing and often local payroll withholding.
The employee’s salary is in principle taxable where the work is physically performed, under the employment income article of the treaty. Split working days mean split taxing rights and payroll obligations on both sides. The Netherlands has signed a new tax treaty with Belgium; check its entry into force on verdragenbank.overheid.nl and involve a tax adviser before the payroll is set up, as we advise on the employment-law side only.
What about health and safety and data protection?
Under the Working Conditions Act (Arbeidsomstandighedenwet), the employer must pursue a policy of the best possible working conditions (Article 3) and make a risk inventory and evaluation (Article 5), also for a home workplace. An accident there can lead to employer liability under Article 7:658 of the Dutch Civil Code (BW), so use a self-assessment, an equipment standard and a reporting route that works from abroad.
Remote work inside the EEA creates no data transfer issue under the GDPR. Access to personal data from a third country does require a transfer basis under Chapter V GDPR, which “work from anywhere” schemes regularly overlook.
What should you check as an employer?
- Which country, and what percentage of working time will be done there over the next twelve months.
- Whether the work is pure telework or includes client visits or site work there.
- Whether both states have signed the Framework Agreement, and whether the SVB request has been made and an A1 issued.
- Whether the employee could be habitually working abroad under Article 8 Rome I, and what that country’s dismissal rules require.
- Whether the role, such as contract-signing or client-facing work, creates a permanent establishment risk.
- Whether there is a signed, time-limited and revocable addendum with an annual review date.
What should you check as an employee?
- Whether an A1 certificate has been issued, so you know where you are insured for pension, sickness and unemployment.
- In which country you must file a tax return for the days worked from home.
- Whether the addendum states the agreed place of work and the percentage abroad.
- Whether your employer can revoke the arrangement, and with what notice.
- Which country’s dismissal protection applies to you if the relationship ends.
What can we do for you with cross-border remote work?
Our employment lawyers advise employers and employees on cross-border remote work:
- We assess which social security system applies and prepare the joint SVB request under the Framework Agreement.
- We draft the remote work policy and a time-limited, revocable addendum to the employment contract.
- We analyse which mandatory employment rules of the other country apply under Article 8 Rome I.
- We check whether on-site work abroad triggers posting rules and a WagwEU or foreign notification.
- We coordinate with your tax adviser on payroll and permanent establishment questions.
Summary
- Cross-border remote work raises three separate questions, social security, employment law and tax, and each can point to a different country.
- Social security follows the 25% rule in Article 13 of Regulation 883/2004; the Framework Agreement can keep Dutch social security up to just under 50%, but only on a joint request through the SVB.
- A Dutch choice of law does not switch off another country’s mandatory employment protection once the employee habitually works there (Article 8 Rome I).
- Client-facing or contract-signing work from a foreign home office can create a permanent establishment for the employer.
- Put a time-limited, revocable addendum and a review date in place before the arrangement starts.
Frequently asked questions
Does the Framework Agreement apply automatically if my employee teleworks less than 50% from abroad?
No. Employer and employee must jointly request it, for a Dutch employer through the SVB, and an A1 certificate must be issued. Until then Article 13 of Regulation 883/2004 applies, so an employee above 25% in the state of residence is insured there.
Can I choose Dutch law in the contract and rely on it?
The choice is valid, but under Article 8 Rome I it cannot deprive the employee of the mandatory rules of the country where they habitually work. Dismissal protection is very often mandatory.
My employee wants to work from Denmark. Is that covered?
Not by the Framework Agreement, as Denmark has not signed it. If 25% or more of the work is done from Denmark as the state of residence, Danish social security applies and the Dutch employer must register and pay contributions there.
How often should we review an approved arrangement?
At least once a year, because the 25% threshold is assessed over the next twelve months, and immediately after a move, a change of role or hours, or new client-facing activity in the other country.
