Consequences of contributions paid in the wrong country

In principle, you must be affiliated with the social security system of your State of employment and pay the corresponding contributions there.
But what happens if your contributions have been paid in the wrong country? This article outlines the consequences of such a situation and the steps to be considered.

Common European rule for the Greater Region countries

Paragraph 2 of Article 73 of Regulation (EC) No. 987/2009 establishes an administrative regularization procedure between social security institutions, called the ‘compensation mechanism.’

When the final determination of the applicable legislation occurs after a period of provisional affiliation, the institution that temporarily collected the contributions does not immediately reimburse them to the insured person or the employer. It must first contact the institution ultimately recognized as competent to identify the amounts actually due under the applicable legislation.

At the request of this competent institution, the unduly collected contributions are transferred directly between institutions for the relevant period. They are then considered to have been paid to the competent institution from the outset. If the amounts temporarily paid exceed the contributions actually due in the competent State, the overpayment is reimbursed to the person concerned.

This mechanism thus ensures inter-institutional regularization without any interruption of rights for the insured, while guaranteeing that affiliation complies with the coordination framework of European Union law.

Situation in which social security contributions should have been paid in France

Regularization of social security contributions

If regularization occurs following an administrative or accounting audit by the URSSAF, several consequences may arise. In case of errors, omissions, or underpayments, the URSSAF notifies the person concerned of the proposed adjustments. URSSAF may claim retroactive payment of social security contributions that were not paid. These amounts may be increased and subject to penalties.

Even during an audit, the right to make a mistake (‘droit à l’erreur’) can limit sanctions if you acted in good faith and the error was unintentional, particularly if you immediately regularize your situation after being notified of the audit.

However, the right to make a mistake does not apply:

in cases of bad faith or repeated errors;
in cases of fraud, including undeclared work;
if the delay or omission of declaration exceeds the legal deadlines.

Limitation period

As a general rule, URSSAF can claim social security contributions only within three years from their due date, but this period can be extended to six years in cases of fraud or undeclared work.

Situation in which social security contributions should have been paid in Luxembourg

Regularization of social security contributions

In Luxembourg, only the Centre Commun de la Sécurité Sociale (CCSS) is authorized to demand retroactive regularization of social security contributions.

Regularizations include arrears of contributions increased by late payment interest as well as possible administrative fines. The rate of late payment interest is set at 0.6% per full calendar month.

Limitation period

The limitation period is 3 years, extended to 10 years in cases of fraud or false declaration.

Situation in which social security contributions should have been paid in Germany

Regularization of social security contributions

German social security funds have the right to audit declarations and payments. In case of errors or omissions, they may request the regularization of missing contributions by adjusting the amount due.

Limitation period

Contribution claims become time-barred after 4 years from the end of the calendar year in which they became due.

Situation in which social security contributions should have been paid in Belgium

Regularization of social security contributions

Employers are required to pay the contributions due to the National Social Security Office (ONSS) within the legal deadlines. Failure to comply with these deadlines generally results in the application of the following financial penalties:

a 10% surcharge on the amount of contributions not paid within the legal deadline;
late payment interest at a rate of 7% per year, calculated from the expiration of the legal payment deadline and due until the amounts are actually paid.