At the beginning of this year, various reports circulated that the EU wants to abolish A1 certificates. Unfortunately, it is now clear that the abolition of the A1 certificate, especially for short-term business trips, which is desired by many business representatives, will not come at short notice.
Why is an A1 certificate required for business trips abroad?
If a (German) employee, self-employed person or civil servant works for his company in another EU country (including EEA states and Switzerland), double social security contributions would be incurred without special regulations. In addition to the obligation to take out insurance in Germany, foreign social security contributions may also have to be paid due to the activity abroad.
Is the A1 certificate also required for short-term assignments?
There is often the misconception that the A1 certificate is only required for projects abroad lasting several months. This is not the case. Even for one-day business trips or hourly stays, an A1 certificate must be applied for.
What happens if you don’t have an A1 certificate?
In some countries, there is a risk of fines if the A1 certificate cannot be presented during inspections. Some states accept at least the application as proof of an A1 certificate.
Does the foreign client need the A1 certificate?
It is not uncommon for social security issues to be part of a company’s internal compliance system. There is therefore a risk that foreign clients will require the A1 certificate as a prerequisite for working abroad. If they are not submitted, there is therefore a risk that access to the foreign construction site or to the foreign company of the client will be denied.
Can the A1 certificate also be applied for retrospectively?
Against the background of inspections that have begun and possible fines, companies are recommended to apply for the A1 certificate for employees before starting a business trip and to carry the A1 certificate with them on the business trip. Since the application process takes a few days, the application should be made as early as possible. The principle applies: first apply for and issue the A1 certificate, then go on a business trip!
How does the application process work?
Since the beginning of 2019, applications for an A1 certificate can only be submitted electronically. For employees with statutory health insurance, the respective health insurance company is responsible; other bodies are responsible for the self-employed, civil servants and privately insured persons. For permanent assignments, an “A1 permanent certificate” can be applied for. This must be done for each country of activity. The application is usually made via the company’s salary program, which regularly also generates evidence for the application.
What should I do as a company?
Especially in larger companies or in companies with a decentralized structure, the processes of business trip request and business trip accounting are decoupled. Often, the application for business trips is made in the specialist departments; but the accounting then with a time delay in the HR department. At this point, the application for an A1 certificate is too late. Companies should therefore review and adapt their processes in this regard.
Does the topic of “A1 certificate” have an impact on compliance systems?
Companies that regularly post employees abroad or have employees of foreign clients work in Germany should implement the associated social security aspects in an existing compliance system or take alternative measures to ensure that such matters are handled appropriately.
Do you have international assignments in the company? What experiences have you had on the subject of A1 certificates? We look forward to your comments.
Image Credit: Unsplash, Photographer: Brett Zeck
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