Tax

New social security treaty between the Netherlands and China

Arthur Gude Arthur Gude

A new social security treaty, between the Netherlands and China, contains provisions that affect the existing social security legislation of both the Netherlands and China. This social security treaty is expected to enter into force in 2017. This new treaty will impact amongst other employees assigned to work between the Netherlands and China.

Matters covered

The social security treaty covers various Dutch and Chinese social insurance schemes.
For the Netherlands it covers the old-age, unemployment and survivors insurance schemes. For China it covers the basic old-age insurance for employees and unemployment insurance.

Main rule regarding the applicable legislation

The main rule is that an individual is subject to the social security system of the country where he performs his activities (host country).

Secondments

If an employee is temporarily seconded by his employer (who is situated in one country) to the other country, the social security system of the country of origin remains applicable.
A secondment is considered temporarily if the secondment period does not exceed 60 months.

Other exceptions

Exceptions to the main rule are made for employees on board of a sea-going ship, members of the crew of an aircraft, civil servants, members of diplomatic missions and consular posts.

Persons covered

The social security treaty applies to any individual who is or has been subject to the Dutch or Chinese social security legislation.
Not only an individual with the Dutch or Chinese nationality will be covered by this social security treaty. Also a third country national who is or has been subject to the Dutch or Chinese social security legislation will be covered by this social security treaty.

Family members

In principle the social security treaty also applies to family members who accompany the employee. This means that family members of seconded employees will in principle be covered under the social security system of the country where the employee is covered, unless they are employed or self- employed in the territory of the other contracting party.

Transitional provisions

In case of persons who have been working in the territory of one contracting party prior to the date of entry into force of this agreement, the periods of secondment shall be considered to begin on the date this agreement enters into force.

More information

For more information about the new Dutch-Chinese social security treaty and the possible impact, please contact Arthur Gude or your usual contact person within Grant Thornton. We will be glad to assist you.