EU tax and visa update for recruitment agencies

EU tax update recruitment

20th March 2023

From new visa regulations across EU member states to local changes in immigration rules, there are many areas that recruitment businesses placing global contractors need to grasp. Understanding local laws and EU directives can get complicated at the best of times and so in this new instalment of our blog, we endeavour to bring some of those key changes to your attention. We also, as always, report on the ongoing battles in the war against tax evasion and fraud as local tax authorities in the EU ramp up their activity to prosecute companies who stand accused of non-compliance and financial wrongdoing.

Let’s start in Germany, the EU’s largest and most prosperous economy, with some latest developments concerning its Skilled Immigration Act, first introduced on 1 March 2020. The legislation seeks to simplify procedures and make it easier for highly skilled non-EU nationals to obtain visas to live and work in the country. With talent shortages hurting the economy, the Government has recognised the urgent need to attract foreign workers to help plug the gaps across a wide range of sectors, which are hampering the country’s productivity and growth, reducing its global competitive advantage.

So how is the current legislation being adapted? According to, there are five main areas of change. Foremost among them is to make the EU Blue Card residency document for highly qualified workers, which can also open the door to work across all member states, more widely available to those with university degrees. The German Government also wants to do away with the bureaucracy related to the time-consuming formal recognition of degrees and professional qualifications. Evidence of a foreign degree and experience will now be deemed sufficient to qualify.

The other change linked to the above is that it will no longer be necessary to provide the aforementioned proof in advance. Individuals can do so after they have entered Germany, which means that German companies can hire faster. Foreign workers will also be granted an Opportunity Card, which is a one-year visa that will allow them to look for work once they set foot in Germany, rather than having to secure employment before arriving. The final key amendment regards temporary labour, with the Government keen to help employers hire talent for short-term needs.

Tax fraud dangers for recruitment businesses in the EU   

Meanwhile across the Channel, the French taxpayer is having to pay €14.6bn in unpaid taxes which is the estimate of what it is owed following the 2022 tax authorities fraud assessment carried out by the Public Accounts Ministry. Two thirds of the amount (€9bn) are company tax liabilities. The fight against fraud in France also extends to social benefits and contributions as well as customs fraud involving drugs and tobacco, for example. Typically, as revealed in 2021, the sums that were collected in practice fell short of projections given in part to company liquidations and lengthy appeals procedures.

In neighbouring Spain, authorities are looking to clamp down on what the country’s ‘Agencia Tributaria’ refers to as “residents who artificially reduce their fiscal bill by using the non-resident tax” – referred to as fake non-residents. As part of its campaign to crack down on tax fraud, Spanish authorities are also looking to target cryptocurrencies and any other links to criminal activities and ill-gotten gains that could be defrauding the Government. Spain’s tax agency is also carrying out what are called ‘peinados’ where the underground economy is tracked for any undeclared payments.

And our final piece of news regards the Republic of Serbia, which has succumbed to EU pressure by introducing visas for citizens of Bolivia. According to, the changes, which came into effect on 10 February, apply to both normal passport holders as well as those with diplomatic passports. They serve to align the country’s visa requirements policy with that of other EU member states. Serbia however continues to allow visa free entry to a number of countries, such as Armenia, Russia, Belarus and Turkey, who do not recognise the Republic of Kosovo as an independent country.

The war on tax evasion and fraud is very evident as tax authorities in EU member states seek to crack down on any illegal activity that is costing their countries dear. Meanwhile countries like Germany are seeking to facilitate entry of skilled foreign workers to help combat growing skills gaps. Clearly, the implications for recruitment businesses placing global contractors are far reaching – they must fulfil their EU tax obligations as well as be aware of all the latest immigration and visa requirements. These issues can be a minefield, so please speak to our experts should you need any advice.

6CATSPRO is part of WorkwellTM Group

To read more of our blogs click here

And follow us on LinkedIn

Contact Us