New EU rules on social security contributions could hit shipping companies
21 July 2010

Leading accountant and shipping industry adviser Moore Stephens has warned that companies operating EU-flag vessels will need to be aware of new regulations from Brussels governing the payment of social security contributions which came into effect on 1 May this year.

Prior to the inception of the new rules, mariners were taxed under EC regulations in the vessel's flag state, subject to certain exceptions. The position remains substantially the same under the new rules, with social security contributions for seafarers being paid in the member state in which the vessel upon which they are employed is flagged. But Moore Stephens partner Steve Durman points out, "The exceptions to this rule have been greatly simplified under the new regulations, with the result that the only exception now will involve contributions in respect of seafarers who are remunerated by an ‘undertaking' in a member state where they reside, in which case the legislation of the member state of residence will apply.

"So, for example, seafarers resident in the UK working on German-flag vessels but paid by a UK-resident agent of the shipping company will be subject to UK national insurance and their agent will be treated as their employer for national insurance purposes. Given the disparity between levels of social security contributions throughout the EU, the industry will need to be alert to the financial implications for their employment strategies under the new rules."

Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 630 offices of independent member firms in 98 countries, employing 20,864 people and generating revenues in 2009 of $2.1 billion.

For more information:

Steve Durman, Moore Stephens LLP, Tel: +44 (0)20 7334 9191, email: steve.durman@moorestephens.com