Inspector is not permitted to offset contributions paid in another Member State | Deloitte Nederland


Inspector is not permitted to offset contributions paid in another Member State

The inspector is not permitted to offset national insurance contributions paid in another Member State against Dutch national insurance contributions. This is only permitted for contributions paid provisionally, which is not the issue in this case.

11 February 2021

Double national insurance contributions

Offsetting national insurance contributions paid in another EU Member State against national insurance contributions to be paid in the Netherlands is not permitted. The Supreme Court recently confirmed this.

A Cypriot employer employed an employee who worked aboard a ship navigating the Rhine. The employer had deducted Cypriot national insurance contributions from the employee's salary and paid them. A year later, the SVB (the Dutch social insurance bank) issued an A1 certificate for the period in which contributions had been paid in Cyprus. According to this A1 certificate, the employee was insured for social security in the Netherlands. In his income tax return, the employee subsequently requested an exemption from the national insurance contributions due in the Netherlands. However, the inspector refused to grant this exemption.

The Den Bosch Court of Appeal had previously ruled that this was a matter of double national insurance contributions. A situation that would be facilitated by the fact that the SVB is responsible for determining the applicable social security legislation and the Tax Administration for national insurance contributions. Neither body would have an interest in preventing double taxation. The Court of Appeal proposed a solution, which was to offset the social security contributions paid in the other EU Member State against the Dutch national insurance contributions. According to the Supreme Court though, this is not permitted because it is based on an incorrect application of European legislation.

Offsetting is not permitted

If two Member States disagree about the applicable social security legislation, they can agree to provisionally apply one of the two legislations. Should the final view on the insurance obligation still be different, a mechanism has been provided for under which contributions paid provisionally in one Member State are offset against contributions ultimately due in the other Member State. The Rhine Agreement, though, only declares the legislation of a single Rhine riparian state to be applicable. It does not provide for provisional application of that legislation. Hence, offsetting is not possible in this case, as it lacks a legal basis.


• Supreme Court 5 February 2021, ECLI:NL:HR:2021:187

• Supreme Court 10 July 2020, ECLI:NL:HR:2020:1150

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