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As a general rule, European Union (EU) citizens can freely travel to other EU countries, as well as European Economic Area (EEA) countries (Iceland, Lichtenstein, and Norway) and Switzerland. However, if the purpose of the visit is business-related, employees must provide proof that they’re paying into their home country’s social security system. Employees might be double-taxed if they cannot provide the necessary documentation. They could also face legal issues since EU law mandates that individuals can only pay social security taxes in one country.
Employers can prevent this by obtaining an A1 certificate for employees prior to any business trips. Self-employed individuals must also obtain an A1 certificate before traveling on business within this region.
Let’s dive into what an A1 certificate is, when you need it, and how to get one.
An A1 certificate is a formal document confirming that the certificate holder is covered by the social security system in their home country. It’s necessary for EU/EEA residents traveling to another European country for business purposes, even if it’s a short business trip. The certificate maintains social security benefits for traveling workers in the country where they live and prevents dual social security contributions.
An A1 certificate is mandatory for employees or self-employed persons temporarily working in a different EU/EEA country for general business purposes. This includes business trips the individual initiated themselves, as well as trips undertaken at the direction of their employer. This requirement also applies to business trips to Switzerland or treaty countries.
Otherwise, per the Posted Workers Directive, an employee temporarily working in another EEA or EU member state would be required to pay local social security taxes on the day they arrive.
For example, if a salesperson in France travels to the company’s office in Germany to train new employees for one week, they would need an A1 certificate. Otherwise, the salesperson risks having social security contributions deducted in both France and Germany.
The employer is responsible for applying for the A1 certificate on behalf of their employee. The employer must request a PD A1 form from the social security institution in the employee’s home country and inform the host country’s authorities before the upcoming business trip.
The employer or employee must complete the application form, which asks for details regarding the employment, length of the assignment, and other specific information regarding the business travel.
Processing times vary, so businesses should apply for the certificate well in advance of any planned travel. Once approved, the applicant receives the A1 certificate in digital or paper form. The employee must provide copies to their employer and the relevant social security institutions in the host country.
Self-employed people need to apply for the A1 certificate themselves.
Worth noting: An A1 certificate is specific to one business trip. The employer or self-employed person must apply for a new certificate for any subsequent business travel.
The A1 certificate is good for two years. If the employee needs to stay longer, they’ll either have to apply for a new A1 certificate or pay social security in the country where they’re working.
It’s mandatory for employees to have an A1 certificate when traveling to another EU/EEA country for work. Without one, they won’t be able to prove which country they pay social security in, and could be penalized.
The penalties for not securing an A1 certificate in advance of business travel can include:
One way to avoid fines for not obtaining an A1 certificate or other potential labor law violations is by partnering with an Employer of Record (EOR) like Remofirst. An EOR assumes legal responsibility for hiring and managing employees on behalf of a company expanding globally. The EOR takes on all formal employment tasks, including global payroll, and ensures compliance with local employment laws.
Book a demo to learn how Remofirst can help your company hire in more than 180 countries.
