In a letter to the Minister of Social Affairs and Employment, Wouter Koolmees, the Standing Committee on Social Affairs and Employment (SZW) of the Dutch Upper House of Parliament emphasises the importance of the Dutch government’s role in solving specific cross-border issues where possible rather than leaving it up to the EU to find a solution, a position that has been affirmed by the Cabinet.
In the letter, the Parliamentary Committee refers to the cross-border impact assessment, which is conducted by the Institute for Transnational and Euregional cross border cooperation and Mobility (ITEM), as an instrument to help prevent border problems. The Committee also makes specific requests for the implementation of two of the recommendations of the Border Workers Commission, which is led by ITEM's Prof. Marjon Weerepas.
Lack of fiscal coordination
In its letter to the Minister, the Parliamentary Committee calls for better and more coherent coordination between the rules on taxation in the bilateral tax treaties and social security contributions, specifically regarding European Regulation (EC) No 883/2004. They raised two specific problems faced by frontier workers due to a lack of fiscal coordination:
the undesirable fiscal switch in the case of parental leave and sick leave during the employment of frontier workers in relation to Germany and
the professorship provision in the bilateral tax treaty with Belgium
In both of these cases, ITEM has provided analyses and policy recommendations. The professorship provision was also addressed in the inaugural speech by Prof. Marjon Weerepas.
As a result of the professorship provision in the Netherlands-Belgium bilateral tax treaty, a Belgian professor who works in the Netherlands is liable to tax in Belgium, but is socially insured and liable to pay social security contributions in the Netherlands. This results in major differences in income and red tape. An earlier recommendation of the Border Workers Commission (see recommendation 17) is reiterated by the Parliamentary Committee in its letter: to amend the treaty by means of an additional protocol to the existing treaty. This is a quick and simple solution. Thus far, the State Secretary for Finance, Menno Snel, has been calling for change by means of the general, ongoing, treaty amendment. However, this may take a long time.
Act on the Standardisation of the Legal Status of Civil Servants (WNRA)
In their letter, the members of the SZW Parliamentary Committee point to the cross-border impact assessment as an instrument for preventing border problems. They also point to a legal act that is covered in ITEM’s upcoming impact assessment, namely the Dutch Act on the Standardisation of the Legal Status of Civil Servants (WNRA). This act will enter into force on 1 January 2020, causing many civil servants to lose their legal status as civil servants. This will have consequences for the tax and social security conditions of civil servants who are frontier workers in the Euregion, as well as for their employers. The Committee asks whether the government can provide solutions for the effects of the WNRA will have on frontier workers.
Border Workers Commission recommendation: an expert working group
In its letter, the SWZ Parliamentary Committee requests, given the above problems, that a group with experts in tax and social security be organised. This request also reiterates one of the recommendations of the Border Workers Commission, which calls for the appointment of a working group that addresses the coordination problems. As noted by the Committee’s letter, Minister Koolmees reacted ‘extremely cautiously’ to this recommendation in his previous correspondence by responding that the coordination regulation is a European regulation and outside the scope of the national government. The SWZ Parliamentary Committee responds to this in its letter by requesting that, though the Cabinet also refers to the search for solutions in bilateral treaties, to comply with this recommendation of the Border Workers Commission.
What is the Cross-border Impact Assessment?
The SZW Parliamentary Committee refers to the cross-border impact assessment as an instrument to help prevent border problems. So, what is the impact assessment? Since 2016, the annual cross-border impact assessment has been published by the Institute for Transnational and Euregional cross border cooperation and Mobility (ITEM). This assessment analyses important ex ante and ex post legislative and policy-related files of the European Union, national governments (Netherlands, Belgium, Germany, Luxembourg), and regional authorities (i.e. North Rhine-Westphalia, Lower Saxony, Flanders, Wallonia, German-speaking Community) that positively or negatively affect frontier workers, cross-border cooperation and regional socio-economic development.