We previously informed you about the forthcoming social security treaty between the Netherlands and China. The parliaments of both countries have now ratified the treaty and it will enter into force on September 1, 2017.

What you need to be aware of

As of September 1, 2017 employees seconded to China can remain partly insured for social security purposes in the Netherlands for a maximum period of five years. This also applies to existing situations. Family members that relocate along with the secondee are also covered, unless they work in China themselves.

Certificate of Coverage

For the purposes of the treaty, a Certificate of Coverage is mandatory. This Certificate of Coverage must be applied for at the Social Insurance Bank (Sociale Verzekeringsbank). The issued certificate must then be shared with the Chinese group company, so that it can submit the certificate to the Chinese authorities (the Social Insurance Administration of the Ministry of Human Resources and Social Security). If this process is completed within six months of the commencement of the secondment, China will grant an exemption with retroactive effect to the commencement date of the secondment. With regard to secondments already in place on September 1, 2017, an application for a Certificate of Coverage must be submitted, granted and registered within six months of September 1, 2017. You should therefore submit the application promptly.

Not for all Dutch social insurance

It is worth noting that the Certificate of Coverage does not apply to all Dutch social insurance, but only to the continued accrual of Dutch state pension/surviving dependents’ and unemployment entitlements. The Dutch basic health insurance is thus not continued, nor is the WIA insurance (Work and Income according to Labor Capacity) and the child benefit. International medical insurance with worldwide coverage is therefore important. To cover the consequences of occupational disability you could consider applying to the Employee Insurance Agency (in Dutch: UWV) for a voluntary WIA insurance. Premiums for medical assistance and work accidents may still be payable in China (this differs per region). For secondments from China to the Netherlands, the treaty only provides for a continuation of the Chinese basic old age insurance and unemployment insurance; a Dutch contribution and insurance obligation applies to other types of insurance.

Payroll administration

The aforementioned limited operation of the treaty means that extra attention must be paid to the processing of social insurance contributions for secondments from and to China in the payroll administration.

If you have any questions regarding the above, please approach your designated contact at Meijburg & Co.

Click here to download the memorandum in pdf format