A whole host of tax, labour and social security issues arise for companies and employees when they are set to work abroad. The employment contract needs to be adapted, it needs to be clarified in which country the income will be taxed in the future and, last but not least, the employee needs to be covered by social security. With dhpg, you have a partner at your side that is on top of all the questions that arise and is able to answer them from a single source. Our tax advisors specialise in employee assignments and have global contacts. As a member of Nexia International, we are represented in 125 countries worldwide and are ideally positioned to answer all your questions – a real gain for you and your employees.
The CROSS GLOBE network supports companies in organising the secondment of employees abroad in a legally and economically optimal way. Services that we provide together with our CROSS GLOBE partners in the context of employee secondment include:
No matter in which country and in which constellation your employees work there (e.g. installation, secondment, transfer, home office, mobile working): With dhpg you are perfectly poised. dhpg is not only a member of Nexia International, but also of the CROSS GLOBE network. In addition to the services offered by dhpg, the CROSS GLOBE network can advise you on security issues, insurance, visa issues, intercultural preparation, language courses, relocation and school issues.
In addition to tax, labour law and social security issues, we support you with our CROSS-GLOBE partners when it comes to visa and security issues, insurance, intercultural preparation, language courses as well as relocation and school issues.
Would you like to get together in a personal meeting? We would be happy to arrange an appointment with you – no commitment necessary on your part – so that we can get to know each other. We look forward to your call or e-mail and to meeting you.
A secondment abroad under social security law is when an employee temporarily performs his or her work abroad on the instructions of a company. The time period usually results from the type of employment. The completion of a project in another country can serve as a good example here. In principle, there is no time limit for the secondment whether it be only one year or longer under German law, but there is one under the EU regulation for posting within the EU, the European Economic Area and Switzerland, as well as in bilateral social security agreements.
In addition, the German company can "transfer" the employee to the foreign branch. This is often referred to as "secondment" in the broader sense, but is no longer deemed to be true secondment under social security law. It makes sense for companies and employees to seek advice on tax, labour and social security law before starting the stay abroad in order to avoid double expenses, to retain social security entitlements and to submit the necessary applications (e.g. A1 application).
For tax purposes, a distinction must be made as to whether the secondment is to a foreign group company or permanent establishment (= foreign tax liability in case of doubt from the first day) or – if this is not the case – whether the employee will be staying in the host country for longer than 183 days. Depending on the double taxation agreement, the 183-day limit refers to the tax year of the host country, the calendar year or a twelve-month period spanning several calendar years.
A secondment contract should be concluded before the start of the stay. This contract usually contains the following information:
A new Law on the Posting of Workers was passed in 2020 with the aim of protecting seconded workers. It aims to ensure that seconded workers receive the same legal and collectively agreed working conditions as the domestic team. These include:
dhpg is a member of the interdisciplinary CROSS GLOBE network. With the help of this network, employees can be brought back in the event of a crisis. The network also offers other important services related to the stay abroad, such as competent support in the following areas:
Business and political issues
Human resource as well as personal matters
Wages, taxes and insurance
Laws and regulations
For EU/EEA citizens, this is generally permissible within the EU/EEA. However, the social security and tax implications and, if applicable, the necessary applications must be reviewed and filed in each individual case so as to avoid any rude awakenings in the form of gaps in social security or double payment/tax obligations. Particularly in the case of periods that are not only temporary and closely limited in time, the effects under labour law must also be examined.
In the case of mobile work/working from home in non-EU countries, there are also visa and residence law aspects that need to be clarified before starting work abroad in order to avoid illegal entry or "working under the table".
The temporary secondment of an employee abroad should always be supported by experts in labour law, tax law and social security law. Contact dhpg – whether you are a company or an employee. We have already successfully supported many clients in the deployment of their employees abroad. The internationally active network of independent consultants Nexia International offers you access to tax and legal experts in more than 125 countries. With our partners from CROSS GLOBE, we are ideally positioned to help you with anything from visas and residence permits to finding real estate and accommodation, insurance and repatriation in the event of a crisis.