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25.07.2019

EU-/EEA Member States & Switzerland: Business Trips and A1 certificate of coverage

The application for an A1 certificate is still necessary as no qualified majority was reached in the European Council about the proposed amendments

Key Facts
  • Requesting an A1 certificate for every single cross-border business trip within the EU- / EEA- Member States and Switzerland leads to an enormous administrative burden since it is mandatory regardless of the purpose or duration of the trip.
  • The EC Regulation does not mention any minimum time period, so even for very brief cross-border business trips an A1 certificate needs to be applied for.
  • This topic gained importance due to an increase of controls conducted by authorities based on legal reporting and registration obligations for posted workers imposed by EU enforcement Regulation 2014/67/EU.
  • On 18 April 2019 no qualified majority was reached in the European Council for the proposed amendments to EC Regulation 883/2004 by the European Parliament and the decision has been postponed.
Author
Frank Dissen
Partner
Lawyer, Certified Tax Consultant
Frankfurt
> View Profile

The EC regulations on the coordination of social security systems within the EU- / EEA- Member States and Switzerland (in particular EC Regulation 883/2004) are, in fact, a true success story. Based on just a few paragraphs, the aforementioned EC Regulation determines which social security scheme applies for cross-border workers. The applicable legislation covers all branches of the social security system and prevents double payments to different social security schemes since the employee is subject to the legislation of a single Member State only. The A1 certificate of coverage needs to be applied to prove the remaining coverage under the home social security scheme. Once the A1 certificate has been issued by the competent social security authority, it is generally binding for everybody: the employee and his/her employer, the social security authorities in the home and host countries and even the national courts (this was confirmed several times by the European Court of Justice). So, in a nutshell - the A1 certificate of coverage is a very important document.

Administrative nightmare

The A1 certificate indeed makes sense if an employee is posted for several months from one EU Member State to another or regularly works in 2 or more EU Member States – even for an unlimited time period. However, requesting an A1 certificate for every single cross-border business trip within the EU- / EEA- Member States and Switzerland leads to an enormous administrative burden since it is mandatory regardless of the purpose or duration of the trip.

No minimum time period

The EC Regulation does not mention any minimum time period, so even for very brief cross-border business trips – e.g. one day – an A1 certificate needs to be applied for. What sounds astonishing, was already known in the 1970s. The “old” EEC Regulation 1408/71 stated an obligation to request a certificate of coverage regardless of the posting’s duration as well (known back then as an “E101” certificate).

Increase in controls

Even though the obligation to apply for certificates of coverage is not new, this topic gained importance due to an increase of controls conducted by authorities based on legal reporting and registration obligations for posted workers imposed by EU enforcement Regulation 2014/67/EU (please see Karl Waser’s article from Austria in the Global Mobility Newsletter 1/2019). Notwithstanding that the transmission of the above-mentioned Directive into national law has led to 28 different implementations, there is one point all 28 EU Member States have in common: the A1 certificate is needed as as a proof of the applicable social security scheme. Some EU Member States focus their controls particularly on business travelers (e.g. France and Austria), and cases have come to light where significant administrative fines were imposed.

State of play

On 23 November 2018, the European Parliament proposed several amendments to EC Regulation 883/2004. Based on the proposal, a provisional agreement was published on 19 March 2019 - including the exemption from the obligation to apply for an A1 certificate for business trips. However, on 18 April 2019 no qualified majority was reached in the European Council and the decision about the proposed amendments has been postponed until the next European Parliament will be formed. Therefore, you currently still need to apply for an A1 certificate – even for very brief cross-border business trips.

Article published in Global Mobility Newsletter#1/2019
Brief overview of recent or expected changes in the area of Global Mobility in 9 selected countries
View publication
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