1 September 2017 - On 12 September 2016, the Netherlands and China signed a social security treaty. The social security treaty enters into force on 1 September 2017. This treaty will limit double social security coverage and contributions. As a consequence the costs for social insurance in assignment situations between the countries will decrease.
Secondees from the Netherlands to China can remain (partially) insured for social security purposes in the Netherlands for the duration of their temporary activities in China for a maximum period of 60 months. The same applies for employees coming from China to the Netherlands. It is mandatory to obtain a Certificate of Coverage (CoC). A CoC proves that the employee remains partially covered under his home country social security system and is partially exempted from the host country social security contributions. The treaty also applies to family members travelling with the employee unless the family member is employed. An important condition is that the employee, before his assignments starts, has worked for at least 1 month with his formal employer.
The social security treaty does not apply to the complete Dutch social security system. It is applicable for the following Dutch social security components:
- Old-age Pension Act
- Surviving Dependents Act
- Unemployment Insurance Act
Therefore, the treaty is not applicable to other social security benefits such as Dutch disability insurance or Dutch health care. A Chinese employee coming to the Netherlands should therefore take out a (minimum) health insurance with a Dutch insurance company.
In China the social security treaty is applicable for the following components:
- Basic old age insurance
- Unemployment insurance
The issued CoC by the Dutch Social Security Office (SVB) should be shared with the Chinese Social Insurance Administration of the Ministry of Human Resource by the Chinese company where the employee will start his secondment within six months of his commencement. China will then grant an exemption for the aforementioned social security contributions with retroactive effect to the commencement date of the secondment. With regard to secondments which are already in place prior to the date of entry into force of this treaty, an application for a CoC must be submitted, granted and registered within six months after the date of entry.
If you consider to second employees to China we will be happy to advise you and assist you with obtaining a Certificate of Coverage. In case you have secondees from China we can also assist you with payroll processing, determining which Dutch social insurances are mandatory and other matters such as immigration and tax advice.
Would you like to know more about the social security threaty? Please contact Alexander Rasink by e-mail or by phone: +31 (0)88 277 16 15. He will be pleased to help.