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Belgium, Germany, Netherlands sign new cross-border remote work agreement

As of July 1, 2023, a new multilateral framework agreement (MFA) on the application of Regulation (EC) 883/04 will pave the way to post-pandemic cross-border teleworking in the EU.

Posted in: Corporate News, Europe, Global, Helpful Resources, Helpful Resources Germany, Helpful resources Germany, Helpful resources Netherlands, Immigration news
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Published Date: 24 May 2023

Belgium, Germany and the Netherlands have agreed that employees will be allowed to work in their home country up to 50% without being subject to their home country’s social security scheme. Before the threshold was 25%. Employers can make use of this exception by applying for an exemption agreement according to Article 16 of the regulation. Austria has already concluded separate agreements with neighboring countries allowing a threshold of 40%.

Employers in these three countries are now able to offer up to 50% home office to employees living in one of the countries. This may be used to strengthen employer branding to attract highly skilled employees who live near the border and are not willing to relocate to another country. It may also increase current employees’ satisfaction as they would be able to spend more time at home and less time commuting.

On the administrative side, employers are relieved from having to pay social security contributions in the employee’s home country and deal with the set-up of a shadow payroll.

However, there are still several bureaucratic and legal barriers to fully enable up to 50% home office while being compliant. While many neighboring states have concluded special tax exceptions for cross-border employees, this applies only to those living in a 20-30 km radius from the border. If and how this will be adapted to accommodate employees who live outside these areas is still unclear. They will remain taxable in both home country and the country of their place of work.

Another big risk for employers is creating permanent establishments by allowing employees to work as much as 50% in their home country. Member states will need to eliminate the high insecurity and define thresholds for cross-border home offices. But this multilateral framework agreement is a sign that the EU member states have realised the reality of work-from-everywhere and will hopefully continue to lower bureaucratic barriers by applying the lessons we all learned during the covid pandemic.


Relocating your employees and need advice on navigating the bureaucratic and legal barriers associated with cross-border remote working? Contact us!