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European Union Crew Social contributions

Discussion in 'Yacht Crews' started by Crewagency, May 18, 2010.

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  1. Crewagency

    Crewagency Guest

    To all EU Yacht Owners and Crew working for an EU based Employer.

    The new EU regulation 883/2004 is now valid ( 1 May 2010 ).
    In short words every EU based Employer has to pay social contributions
    for his Crew / Employees .
    How will this effect your income or who will pay for this additional costs ?

    I am wondering if the Crew would be interested to get a proper employment contract and is willing to get a reduced salary but later money for retirement ?

    Will the Owner be interested to pay higher salaries or will there be a big flag and company changing to NON EU country's .

    Does it mean that only non EU based Management Companies will take over the Crew payroll and Employment contracts in the future and the crewing for EU Yacht Owners ??

    Thanks
    Alex
  2. NYCAP123

    NYCAP123 Senior Member

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    Given how pensions have been raided and pension agreements later "modified" by large, regulated corporations even with unions I wouldn't hold my breath on that one.
  3. airship

    airship Senior Member

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    Could you please post a link for download of these regulations please?
  4. Marmot

    Marmot Senior Member

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    Far be it from me to be sarcastic but, geez, it would have taken you less time to Google "EU regulation 883/2004" than to beg someone else to do it for you ... when the stewardess finishes peeling your grape maybe she can look it up for you. :rolleyes:
  5. C4ENG

    C4ENG Senior Member

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    I believe that the is reason why the Greeks had burned up there town because of the loss of pensions and "modifications". I am sure people are going to be much more trustful of this EU market in the future..
  6. C4ENG

    C4ENG Senior Member

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    Far be it from me to be sarcastic but, geez, You might think you could be nice and polite to others for a change...
  7. Marmot

    Marmot Senior Member

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    I will stick to Ambrose Bierce's position that "Politeness is the most acceptable hypocrisy" and admit to only rarely indulging in that expression.
  8. airship

    airship Senior Member

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    I have to admit that I finally resorted to googling "Ambrose Bierce": A journalist / writer (lived 1842-1914) and whose often virulent criticism earned him the nickname of "Bitter Bierce". May I call you "Morose Marmot" in future?! :D

    But enough of massaging egos and back to the main subject raised by Crewagency...

    No, I could not find any definitive link after a long search on the EU website of "883/2004" relating to the actual legislation as passed / approved on 01/05/2010. Not that I would probably understand any of the legalese contained in such a document even if I had...?!

    However, I am beginning to understand Crewagency's reasons for introducing this topic. I consulted the UK's HM Revenue & Customs on the subject (see here, with special relevance to mariners and employers / crew agents):

    But let's change the example given above:

    "Rodriguez is a Filipino citizen and cannot realistically be considered as a resident of any EU state (he doesn't own / rent any habitation locally to where the yacht is based - he really does live aboard the vessel...?!) He works on a UK-flagged "private yacht" (and has many friends who also work on other EU-flagged vessels (registered as either "commercial yachts" or "passenger vessels"), such as Greece, Malta etc. - but he has a lot more friends who work on Cayman Islands-flagged "commercial yachts", managed by companies whose "management divisions" at least, are based in the EU..."

    So let's reiterate: "Rodriguez is a Filipino citizen. He works on a EU-flagged vessel (whether private or commercial). Or perhaps, Rodriguez, works on a Cayman Islands registered vessel (whether private or commercial). But the crew agency that manages the crewing of this vessel (or at least in any case, recruited him for the position and in many other aspects, are responsible for payment of his salary etc.) is based in a EU country and therefore (if I read the regulations correctly) also become responsible for payment of social security contributions in the EU country that the crew agency operates..."

    My first reactions are:

    1) "Yacht owners" in Europe generally, have for a very long period been able to escape all or most direct liabilities concerning social security deductions and taxes concerning the payment of salaries to their crews for whatever reasons.

    2) "EU Governments" (who've mostly been operating "hand-in-glove") with their private benefactors - the most recent example being the UK Conservative party and one of their principal "offshore benefactors" - Lord Ashcroft) who continues to have an (undue) influence on the financing of that political party. I read somewhere that it's not the Cayman Islands, Bermuda, Switzerland or any other "offshore tax-havens" that pose the greatest threat to "global economic stability" in terms of tax-evasion and/or avoidance, but in fact New York and London, for their tax-treatment of deals (money) that are carried out on their exchanges, almost without any scruples or real attention.

    3) The next time any head of state (ie. Nicholas Sarkozy) decides that it's OK to spend a few days aboard a superyacht (generously -sic and apparently loaned to him out of "the goodness of their hearts and fortunes by some business big-wig", will be one time too many. So far as the French are concerned, as I understand the current situation, heads need to be rolled (I think they really do mean reintroducing the guillotine) :eek:

    Finally, Crewagency, it's highly probable that the business you operate under present circumstances is eventually destined to fail under current (future rules). Anyway, it probably depended far too much on the "exceptions to the rules" allowed under past legislation for many years (so far as when it comes to crew employment on smaller vessels). Crew agencies, hiotherto mostly involved in activities related to commercial shipping have made their presence felt in the yachting industry in a serious way. Your target was the larger superyachts, requiring 20-50 crew. You felt that this was something you could adequately handle (given your experience in commercial shipping).

    Now that the playing field has changed, will Crewagency and everyone else who poured into the superyacht crewing industry when it appeared to be a great source of profits, finally admit that they won't continue to be considered major players unless they're able to manage all the intracancies of the "luxury-yacht" industry...?!

    Sorry for marmotting...
  9. NYCAP123

    NYCAP123 Senior Member

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    Where do you earn your money? You owe taxes there. Where do you reside? You owe taxes there (although you'll generally recieve a credit for taxes paid elsewhere). The employer is responsible to deduct and pay the taxes owed to where you earned the money (You're responsible to pay estimated taxes at home). Same for social security. That's the way it's been in the US for a long time. There should be no effect on gross salaries.
    Now,
    is a whole different matter. Could you imagine the crew of Bull having Bernie take money out of their salaries for a promise of a pension when they turn 65.:eek:
  10. Crewagency

    Crewagency Guest

    Tax Havens

    Hi Airship, good statement.

    For us as a big player in the Crewing business with our Head Office in Switzerland it will be not a problem to solve this problems for the Crew and Owners.
    I already did my homework and the solution is to offer Crew employment contracts through the Swiss based company called Crewman A " Cost plus Fee"
    or Crewman B " lump sum contract " . Other bigger agency's offers this through a Cayman or an Guernsey contract.
    So an owner will just have to pay administration cost on top of each salary every month.

    BUT any contract signed in the future with a " I will call it 3rd party employer " will result in big changes.
    Here I am not talking about all the Mega - Yachts who will for sure find a solution.
    In my opinion it will affect to the smaller Yachts with just 1-2 Crew that also already paid the EU-VAT for the vessel and now under normal circumstances they now have to pay more money for their Crew.

    For example in Germany if you get 5000 Euro Gross salary and maybe 3000 Euro Net in your pocket ( depends on your status ( Married, Children etc ) ). Employers part will come on Top with again 1500 Euro . So the Employer has to pay around 6500 Euro total and the skipper will get 3000 Euro.
    Thats all fine until you and your family still lives in Germany in case you will get money from the government when you are out of work. But most of my German Skippers do not live anymore in Germany and the reason is the high Tax and high social contribution payment. I am sure that will be the same in other EU country's.

    Another question is also what does the EU-Crew say ???
    Is it interesting for them to pay social contributions to an EU country to get a proper health insurance also for their family ? Will they be interested to get retirement money from the government where they paid some years ?

    For sure for NON EU Crew it is not interesting and will come to a lot of paperwork to get money back. Lets assume that a Skipper worked 25 years on different vessels and maybe crewed by different owners / employment agency's in 8 different country's :eek: and later has to check how much money he will get back when he retired ??? !!! Same will also affect an EU citizen !!

    I would highly recommend to check the different regulations in this country where you are employed and here the regulations for seafarers in case some EU country's have special regulations and some of them say that Seafarers do not have to pay social contributions when they are not citizens of the country for example.

    Have fun.
  11. K1W1

    K1W1 Senior Member

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    Hi,

    It has been a few years since I was on a Crew List as an Officer but I still get involved in the process as a whole when doing a project for a client.

    I am not aware of any of the yacht crew agencies who issue employment contracts themselves.

    The cases I am familiar with are where the agencies are asked for a certain crew member to fill a vacancy. They send a load of CV's the Skipper/HOD looks over them and then follows up on any likely candidates.

    When this new person is employed he or she is employed by the Owning entity of the yacht not by the crew agency.

    Crewagency - If you are on paper as a crew members employer I would hazard a guess that you are not dealing too much with main stream EU or other Western Nationals as your employees.
  12. dennismc

    dennismc Senior Member

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    As usual, Europe will take the money, blow out the door somewhere useless and have to borrow it in the future to pay the members their pension $$$ which are then worth less.
    I see that Seattle WA is now in the same pickle juice as Greece and many other areas due to overspending budgets and no doubt raiding other various departments $$$.
    The sooner that people realize that their financial future belongs in their own hands then maybe we can stop the Governments from promising to look after us with our own money which they have squandered, seems too many expect too much from those who cannot deliver..
    The proof of the pudding is now front and centre. Blame who you like, but it's your life.
  13. ArcanisX

    ArcanisX Senior Member

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    The scheme where employment contracts are between worker and some third-party entity ("staff outsourcing", or "outstaffing") exists in many industries for a long time, it could produce very real benefits in many areas, including taxation. If it isn't widespread in yachting industry now... well, could become :)


    As for social security, pensions e t.c., there is no legislation anywhere preventing you from investing some part of your income yourself, to be used after retirement or whenever.
    More then that, if you do a minimal homework and are not severely, debilitatingly mentally challenged, you will most likely invest better then what effective interest you can hope to get from "mandatory" programs. Most state pension programs are long running on Ponzi scheme, where the money you bring in is not actually invested but used to pay your daddy. (And again, I would rather bring money to my daddy myself, without tons of people taking their cut from it.) Just 0.02$