What EU directive 1408/71 will do for you
I had a meeting with my new editor before Christmas and was fervently instructed to "go forth and bring good cheer to our readers and write an article about Europe."
"Yikes," I thought, "what do I know about Europe? What can I possibly write about?"
I had to breathe a sigh of relief when help arrived from a most unexpected quarter - not więty Mikołaj on this occasion, but a group of politicians who, thanks to their pre-Christmas efforts, provided me with a topic worth writing about.
After hours of negotiations at the Copenhagen Summit in December, we are nearly home, with only the June 2003 referendum standing in our way. Pigheaded, arrogant and determined to fight for what we deserve, we went to Copenhagen with our heads held high and came home to a reception fit for a conquering hero, or at least an Olympic gold medallist.
It wasn't just the Prime Minister's marathon negotiations on Friday the 13th - although all credit to him and his team for standing firm at the eleventh hour. It's been years of hard work and effort, persuading not only the infamous "15," but more importantly all of us back home - Europeans to the core, but Eurosceptics to the last - that the time is right for us to come home to Europe.
Even now, having whooped and cheered into the wee hours of that Friday night, celebrating our great success, by the time we were discussing the final terms of our accession at the breakfast table on Saturday, we were already, in traditional style, harping on what more we might had got if only we'd been this tough right from the start.
The last time your trusted columnist acceded into Europe was 1973. Dad thought it was the best thing since sliced bread, so naturally I did too. My father was always right, so this had to be the case. Anyway, what I remember most from that time is the campaign leading up to the referendum, the party political broadcasts, the flyers, the badges, the special events set up to convince the stubborn islanders (you'll recall I'm from the UK) that the road to Brussels was the only one worth travelling.
I can remember the butter mountains, the wine lakes and the sheer terror (OK, I confess this is perhaps a mild exaggeration) at the thought of all the French, Spaniards, Germans and other continentals who were going to invade our shores as soon as the borders opened and work permit requirements were relaxed. But we survived. Yes, there was an influx of individuals from other member states, but the Brits discovered that the doors swung open in both directions. UK farmers didn't go out of business. Unemployment did not increase (at least not drastically and not as a direct result of EU accession). Wage levels did not drop.
What can we expect 30 years down the line? More of the same I suspect, and a whole lot more, at least for this soon to be "born-again" European. This time around it won't be the colourful badges and jazzy folders that will sway my vote, rather it will be the small print (which didn't interest me in the slightest 30 years ago), which will impact directly or indirectly on my own day-to-day life as well as that of the country as a whole.
I can tell you now that having spent the better part of my life in an EU member state, my vote in June 2003 will be an emphatic "Yes." We'll be looking forward to officially rejoining our historic European home. We'll be heading for the simplicity and convenience of a single currency (sooner rather than later, I hope). We'll have freedom of movement and will, by and large, no longer be the second-class citizens we are currently resigned to when it comes to queuing up at the airport immigration counter. Assignments abroad within the boundaries of the 25 member states will become a daily occurrence, with no more need to spend weeks, and sometimes months, sorting out visas and work permits. We will also, in due course, start to see a unification of certain legal provisions - VAT being a hot favourite.
What, you ask, will happen to personal taxes? Very little. They will remain a domestic issue as in all other member states.
What may change, however, is social insurance. Before you get too excited, don't expect ZUS to revamp just because we are joining the EU. What I was referring to was the EU Directive 1408/71 (the only one whose number I know by heart). In supreme summary form, this directive mandates that social insurance payments should be made in the country where the employment is actually performed. Currently, in Poland and in a number of other accession states, social insurance payments have been linked to the country in which the legal contractual relations are, so that if I work in Poland on the basis of a contract signed with a UK firm, then my income is actually exempt from ZUS. Although ZUS's planning around assignments largely disappeared after the 1999 reform, this change may impact certain expatriate assignment packages going forward. Hence the need for some fine-tuning in the appropriate domestic legislation of each new accession state.
Another change we will see is the combination and cumulation of overall years of service (in member states) in determining entitlements to state pensions and various welfare benefits, so that there will no longer be a need to register voluntarily for ZUS when heading off for a foreign assignment.
A perk for employers (I suspect less so for employees) is that the health care entitlement within the EU member states will now be automatic, so when you head off on your assignment from post on May 1, 2004, you are unlikely to go armed with your current private health insurance paid for by your home or host-country employer; you will instead be eligible to make use of the local national health care scheme - that is, more queues and less quality service. In fact, just like being at home.
Anna Szymańska is a tax senior manager in the Warsaw office of Ernst & Young.
"Yikes," I thought, "what do I know about Europe? What can I possibly write about?"
I had to breathe a sigh of relief when help arrived from a most unexpected quarter - not więty Mikołaj on this occasion, but a group of politicians who, thanks to their pre-Christmas efforts, provided me with a topic worth writing about.
After hours of negotiations at the Copenhagen Summit in December, we are nearly home, with only the June 2003 referendum standing in our way. Pigheaded, arrogant and determined to fight for what we deserve, we went to Copenhagen with our heads held high and came home to a reception fit for a conquering hero, or at least an Olympic gold medallist.
It wasn't just the Prime Minister's marathon negotiations on Friday the 13th - although all credit to him and his team for standing firm at the eleventh hour. It's been years of hard work and effort, persuading not only the infamous "15," but more importantly all of us back home - Europeans to the core, but Eurosceptics to the last - that the time is right for us to come home to Europe.
Even now, having whooped and cheered into the wee hours of that Friday night, celebrating our great success, by the time we were discussing the final terms of our accession at the breakfast table on Saturday, we were already, in traditional style, harping on what more we might had got if only we'd been this tough right from the start.
The last time your trusted columnist acceded into Europe was 1973. Dad thought it was the best thing since sliced bread, so naturally I did too. My father was always right, so this had to be the case. Anyway, what I remember most from that time is the campaign leading up to the referendum, the party political broadcasts, the flyers, the badges, the special events set up to convince the stubborn islanders (you'll recall I'm from the UK) that the road to Brussels was the only one worth travelling.
I can remember the butter mountains, the wine lakes and the sheer terror (OK, I confess this is perhaps a mild exaggeration) at the thought of all the French, Spaniards, Germans and other continentals who were going to invade our shores as soon as the borders opened and work permit requirements were relaxed. But we survived. Yes, there was an influx of individuals from other member states, but the Brits discovered that the doors swung open in both directions. UK farmers didn't go out of business. Unemployment did not increase (at least not drastically and not as a direct result of EU accession). Wage levels did not drop.
What can we expect 30 years down the line? More of the same I suspect, and a whole lot more, at least for this soon to be "born-again" European. This time around it won't be the colourful badges and jazzy folders that will sway my vote, rather it will be the small print (which didn't interest me in the slightest 30 years ago), which will impact directly or indirectly on my own day-to-day life as well as that of the country as a whole.
I can tell you now that having spent the better part of my life in an EU member state, my vote in June 2003 will be an emphatic "Yes." We'll be looking forward to officially rejoining our historic European home. We'll be heading for the simplicity and convenience of a single currency (sooner rather than later, I hope). We'll have freedom of movement and will, by and large, no longer be the second-class citizens we are currently resigned to when it comes to queuing up at the airport immigration counter. Assignments abroad within the boundaries of the 25 member states will become a daily occurrence, with no more need to spend weeks, and sometimes months, sorting out visas and work permits. We will also, in due course, start to see a unification of certain legal provisions - VAT being a hot favourite.
What, you ask, will happen to personal taxes? Very little. They will remain a domestic issue as in all other member states.
What may change, however, is social insurance. Before you get too excited, don't expect ZUS to revamp just because we are joining the EU. What I was referring to was the EU Directive 1408/71 (the only one whose number I know by heart). In supreme summary form, this directive mandates that social insurance payments should be made in the country where the employment is actually performed. Currently, in Poland and in a number of other accession states, social insurance payments have been linked to the country in which the legal contractual relations are, so that if I work in Poland on the basis of a contract signed with a UK firm, then my income is actually exempt from ZUS. Although ZUS's planning around assignments largely disappeared after the 1999 reform, this change may impact certain expatriate assignment packages going forward. Hence the need for some fine-tuning in the appropriate domestic legislation of each new accession state.
Another change we will see is the combination and cumulation of overall years of service (in member states) in determining entitlements to state pensions and various welfare benefits, so that there will no longer be a need to register voluntarily for ZUS when heading off for a foreign assignment.
A perk for employers (I suspect less so for employees) is that the health care entitlement within the EU member states will now be automatic, so when you head off on your assignment from post on May 1, 2004, you are unlikely to go armed with your current private health insurance paid for by your home or host-country employer; you will instead be eligible to make use of the local national health care scheme - that is, more queues and less quality service. In fact, just like being at home.
Anna Szymańska is a tax senior manager in the Warsaw office of Ernst & Young.
