ECJ: Freedom of movement under association agreement

The European Court of Justice (ECJ) held a hearing on October 8th 2008 to consider a German court's request for a preliminary ruling on EU freedom of movement rights for Turkish truck drivers operating out of their home state.

The EEC-Turkey association agreement provides a framework for progressively securing free movement for Turkish workers and freedom for Turkish businesses to provide services within the European Union. The agreement has been qualified, extended and reinterpreted many times since its conclusion in 1963 and has often been ignored by individual EU member states when revising their individual immigration laws.

The current ECJ case arose because of changes to German law requiring Turkish truck drivers resident in Turkey to possess visas in order to drive their vehicles on German roads – even though no such obligation existed on the date on which the relevant protocol to the association agreement entered into force. An ECJ decision can be expected in six months time (C-228/06 Soysal and Others).

Russian Federation: Employer contribution rate set to rise

The Russian government has decided to phase out its current unified social tax (UST) and replace it with a social insurance system (SIS).

UST is an employer cost and requires no contributions from employees. It appears that the cost of the SIS will also be met entirely by employers. However, the three-band UST is built around a basic contribution rate of 26 percent. This will be reduced to a much simpler two-band scale, but with an increased basic contribution rate.

From 2010, companies will have to pay out SIS at a rate of 34 percent of gross pay for those earning less than 415,000 roubles (EUR 11,673) a year, but only at a flat rate of  RUB 141,100  (EUR 3,970) a year for employees above that threshold. Companies currently enjoying tax breaks will be given a five-year exemption once the new system is introduced.

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