According to the European coordination legislation the individuals that work in two states within the territory of the EU, EFTA or Switzerland are only subject of social insurance contributions in one European country. In other words, all social insurances have to paid in one country. At first glace this seems to be straightforward.
However, this regulation causes many demarcation problems. For example:
Example 1: 25% rule
An individual living in Germany and working in Switzerland (e.g. as border worker, international weekly resident, part-time employee), but is working at least 25% in Germany, is fully invoiced in Germany for the social insurances and not in Switzerland. However, this rule is also applicable, for example, if a German international weekly resident or border worker has a workload of 60% in Switzerland and 40% in Germany as home office.
In the past this has caused many problems, as the Swiss social insurances did not want to pay out and the individual was not insured in Germany.
Example 2: Spouse living abroad to be insured in Switzerland
Married couple: The one partner works in Switzerland while the other does not work and lives with two children in Estonia.
In this case, the partner and children living in Estonia have to be insured by a health insurance and accident insurance in Switzerland. These Swiss insurances only cease to apply when the partner living in Estonia starts working in terms of the social insurances.
Example 3: self-employed in one country and employed in another
In these cases, you are subject to social insurance contributions in the state in which you are employed. This is irrespective of the workload. It is possible that, for example, that an individual from Germany is both a member of the administrative board in Switzerland (employment in Switzerland) and the owner of a limited company (GmbH) in Germany (self-employment according to German legislation). That individual will have to be insured with the social insurances in Switzerland for the whole income made in Switzerland and Germany.
We will gladly help and advise you, if you are confronted with the issue of determining the country (application of European coordination legislation) in which the social insurances have to be invoiced.
