Pannon EGTC

Cross-border employment at the Croatian-Hungarian borders

Implementation period: September 25, 2023 - December 24, 2023.

Status: Lead partner

Purpose: During the implementation of cross-border developments and projects, the problem arose from the Pannon ETT that there is no clear and mainly accessible information on Croatian-Hungarian employment issues. The lack of information and the fear of sanctions hinder cross-border employment, which can become a barrier to jointly implemented developments and projects. To solve this problem, we submitted a tender within the framework of the b-solutions call for tenders, which was supported by AEBR. Within the framework of the project, CESCI from the Hungarian side and Crowe Croatia from the Croatian side examined the labor law, social security and tax law rules related to the above obstacle.

The report provides the relevant regulatory framework from the point of view of EU regulation, as well as from the point of view of Croatian and Hungarian jurisdiction. In addition to the description of the obstacle, the report includes a roadmap of possible solutions, focusing on issues that have arisen, such as the tax status of employees, the employer's obligations related to payroll, and various issues related to employment and termination of employment. The main result is that the Croatian citizen can be employed directly by the foreign employer and such employment contract can be subject to Hungarian jurisdiction, however the employee is also entitled to use employment rights and obligations that if they are more favorable under the Croatian jurisdiction. With these findings a clear and easy-to-understand situation was created, so now thanks to b-solutions Pannon EGTC and other Hungarian or Croatian employers operating along the border can once again bravely engage in joint work with employees living on the other side of the border.