AG Wattel delivers opinion in Latvian seafarer case | Deloitte

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AG Wattel delivers opinion in Latvian seafarer case

A Latvian resident worked as a seafarer on board a Bahamian-flagged ship during part of 2013. He was employed by a Dutch employer. The dispute is about whether the employee was covered by national insurances in the Netherlands.

23 August 2017

Dutch version

Consequences of EC Regulation 883/2004 coming into force

Advocate-General Wattel has delivered an opinion in the case about which the Zeeland West Brabant District Court brought a request for a preliminary ruling before the Supreme Court. This regards the District Court’s decision of 20 April 2017 in the Latvian seafarer case.

A Latvian resident worked as a seafarer on board a Bahamian-flagged ship during part of 2013. He was employed by a Dutch employer. The dispute is about whether the employee was covered by national insurances. The underlying question was whether under the Aldewereld and Kik rulings this employee had Dutch social security coverage, since this was the country were his employer was established, or whether under EC Regulation 883/2004 he was insured in Latvia, his country of residence. If the latter is the case, due to EC Regulation 883/2004 coming into effect the Kik and Aldewereld rulings have ceased to be in effect.


Different opinions

In practice this issue has produced diverging opinions. According to the Tax Administration, the Social Insurance Bank and the Employee Insurance Agency, under the Kik and Aldewereld rulings social security is assigned to the country where the employer has its registered office, in this case the Netherlands. The Dutch Association of Tax Advisers (NOB), though, takes the position that under EC Regulation 883/2004 the social security must be assigned to the country of residence. In tax literature too, various authoritative authors have vented opposing opinions on this issue.

Advocate-General Wattel’s conclusion, however, considers this to be an “acte clair”. In his opinion, the implementation of the catch-all provision (article 11(3)(b)) of EC Regulation 883/2004 has made everything clear. In cases like this assignment to the country of residence should take place. The wait now is for the Supreme Court’s opinion.


Major consequences

Should the Supreme Court adopt the AG’s conclusion, this will have major consequences. Article 11a of the Access to National Insurance Decree would, for example, cease to be effective. The practical consequences would be an increase of the burden for Dutch employers with seafarers on ships not sailing under a European flag. They would have to start paying contributions in all the different countries of residence of their employees instead of in the Netherlands. In most countries employers would be required to register and the contributions would have to be processed in a shadow payroll (every month). As employers lack the knowledge about the local systems in these countries, they would soon need the support of a third party to meet their local obligations.

One would hope the Supreme Court will request for a preliminary ruling from the European Court of Justice in this case, for the benefit of the legal development and the promotion of legal certainty of employers within Europe.


Source: Opinion AG Wattel of 3 August 2017, 17/01041, ECLI:NL:PHR:2017:723

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