European taxation issues
Our tax guide for freelance contractors working internationally
European Income Tax arrangements
Tax is due where income is earned, so you will need to pay income tax locally.
Moreover, as well as remitting tax in your country of work, you will need to be aware of the implications of remaining tax resident in your home country.
European Social Security arrangements
Agreements between EU states concerning social security mean that individuals working in one member state can contribute to the social security scheme of another state if a valid E101 certificate has been granted. An E101 certificate informs the authorities of the host country that contributions are continuing in the sending country and prevent a demand from the host country for contributions to its own scheme. The E101 is initially valid for 12 months, however this can be extended upon agreement from both countries concerned.
Some EEA countries have compulsory health insurance schemes. In certain cases, contributions form part of the social security payments, while in others, these must be paid separately.
If you are an EU national, it is worth applying for a European Health Insurance Card, which has now replaced the old E111. Holders of an E101 will receive this card automatically. Depending on your individual and/or family circumstances, you may wish to ensure additional cover through a private health insurance scheme.
Work Permits and Visas
In the Member Countries of the European Economic Area (EEA - see below for member countries) the free movement of workers is a fundamental right which permits nationals of one EEA country to work in another EEA country under the same conditions as that Member State's own citizens. There are still a few restrictions with regards to the ‘new’ EU Member States (those countries which acceded to the EU during 2004 or later), however in most cases an EU/EEA national can take up employment in any EU/EEA State without the need of a work permit.
This right of freedom to work in another country is fully applicable between the “old” (i.e. first 15) EU Member States (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom) and EEA members.
- For Cyprus and Malta who joined the EU on 1 May 2004 the free movement of workers is also fully applicable as no transitional rules apply.
- During a transitional period of up to 7 years after accession of the other 8 Member States of the EU from 1 May 2004 ("The EU-8" - Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia), and of 2 Member States on 1 January 2007 (Bulgaria and Romania), certain conditions may be applied that restrict the free movement of workers from, to and between these Member States.
The restrictions only concern the freedom of movement for the purpose of taking up a job, and they may differ from one Member State to another.
Member States and Dates of Accession to the EU
EU Member States:
- SInce January 1958: Belgium, France, Italy, Luxembourg, Netherlands (Holland), Germany
- Since January 1973: Denmark, Ireland, United Kingdom
- Since January 1981: Greece
- Since January 1986: Portugal, Spain
- Since January 1995: Austria, Finland, Sweden
- Since May 2004: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia (i.e. "The EU-8")
- Since January 2007: Bulgaria, Romania