Taxes
25 February 2020

Do not forget to apply for A1 certificate before a business trip abroad - there is a risk of inspections and penalties

No more business trips within the European Union without A1 certificate. Risk of inspection, penalties and other inconveniences for not having this document increase every year.

Ivana Soboličová

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One of the employers’ obligations when sending an employee abroad is to obtain a document confirming that the employee is socially insured in Slovakia- i.e. A1 certificate. A1 certificate is issued by the country whose legislation is applicable to the posted worker. The document confirms that posted worker is not obliged to pay contributions for social security (including health insurance) in other EU countries. However, according to available statistics only 48% of employees always have A1 certificate during each business trip, and 43% of posted workers have this document occasionally.

Many EU countries are strict in inspections- e.g. France, Austria, Belgium, Netherlands, Luxembourg. Companies face risk of penalties in case their posted employees do not have A1 certificate available. For example, the amount of the penalty in France is above EUR 3,000, but in Austria and in Luxembourg the penalties may reach EUR 10,000. Besides the penalty, companies face even more of the pitfalls- the reputation risk. It is very difficult to get rid of the status of an illegal employer.

Of course, not only companies bear the risks, the risks are also on side of the posted employees. First possible complication may be an unpleasant inspection and if the employee is not able to provide the necessary document, he/she may be interviewed at the police station. Last but not least- in case of health problems or an accident, the posted employee will not have the relevant document proving his/her entitlement to healthcare in the host country.

If you are not sure whether your company complies with the EU legislation, please contact us and we will be glad to advise you. More about A1 certificate is available in our product offering

 

 

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