• Greek client massively reduced social security contributions

    By Citius Trust Limited


    Our client is self-employed in Greece offering services to his clients in Greece. At the same time, he is an employee in Cyprus, working part-time for a Cyprus company. Under the current European legislation (Regulations (EC) No 883/2004 and 987/2009), when a European citizen works in more than one Member States, this person needs to be subjected to social security contributions in only one Member State. Which Member State should be charging for social security contributions is outlined in the applicable laws.

    In our case, our client is subject to the Cyprus legislation with regards to social security contributions based on his specific arrangements, being an employee in Cyprus and self-employed in Greece. This is based on:

    Regulations (EC) No 883/2004 – Article 13 Pursuit of activities in two or more Member States

    [..] 3. A person who normally pursues an activity as an employed person and an activity as a self-employed person in different Member States shall be subject to the legislation of the Member State in which he pursues an activity as an employed person [..].

    The above is not the only condition one needs to meet. There might be applicable time and/or income minimums that need to be met, depending on their specific situation.

    The process the client followed, upon commencement of his employment in Cyprus, is as below:

    • His employer registered him with the Social Security Services in Cyprus;
    • He also registered as self-employed with the Social Security Services in Cyprus;
    • He applied for the issuance of the certificate A1 — Certificate concerning the Social Security legislation which applies to the holder; and
    • Upon issuance of the certificate A1, he submitted this to Greece and requested to be excluded from the Social Security System in Greece, as the Member State legislation applicable to them, as per certificate A1, is now Cyprus.

    From the moment of the completion of the above process, the client’s total income, in Greece and Cyprus, is subject to the Cyprus law with regards to the Social Security contributions. With regards to the income tax, it is worth noting here that the client remains tax resident in Greece where he declares his worldwide income as required. However, given his employment in Cyprus, he also must file annual tax returns in Cyprus, declaring his earnings in Cyprus and paying any resulting income tax in Cyprus.

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  • The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.

Citius Trust Limited

Citius Trust is an independent boutique services firm, which provides bespoke solutions to clients. Our aim is to deliver top quality end-to-end solutions for our clients, optimize costs, streamline operations and processes and drive value. Our directors take the lead role in managing our relationships with our clients, they are always available and provide ad hoc advice. We offer world-class intellectual capital through a transparent, tailored and client friendly approach.

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