The Renewed EU Social Security Coordination in Regulation No. 883/2004 and Its Link with Bilateral Tax Agreements

This article gives a general outline of the new European coordination rules regarding social security in Regulation No. 883/2004 that came into effect on 1 May 2010. These rules have not been fundamentally changed compared to the previous rules in Regulation No. 1408/71.

However, there are some important innovations, and the provisions have been simplified, rewritten, and adapted. As for the rules on the determination of the applicable legislation, the State of employment principle has been confirmed and even strengthened. In actual practice, the new rules and agreements on a better administrative collaboration between the Member States, inter alia, via electronic exchange of data, will be of the utmost importance.

Yet, this new European social security coordination has not changed anything with regard to the lack of coordination with the rules on the determination of the applicable legislation in bilateral tax agreements. This can lead to situations in which a migrating person contributes in more than one State to the funding of social security that is sometimes considered to be an obstacle to the free movement of persons. However, both from the political and legal analyses in this article, it follows that a better coordination between the rules to determine the applicable legislation in social security and in tax matters will not come about easily and probable only on a case-by-case basis.

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