A1 European Certificate: What you need to know

Posting workers to another member state of the EU is a common practice. This is necessary for the international provision of services and products, training, negotiations and different events.

It is important to know that if you or your employees are going to work abroad for an unspecified amount of time, you’ll probably need to apply for an A1 form.

Here we will discuss the applicable laws in this scenario and more specifically, how to obtain an A1 European certificate in Bulgaria.

What is an A1 European certificate?

In accordance with the law of the European Union, citizens of a country member state of the EU have the right to move freely and work within the EU without a special work permit. To put this right into effect, the national social security systems of the EU member states have been coordinated.

According to Regulation No 883/2004, the applicable legislation is that of the member state where the insurance instalments are due, including those for activities and income coming from other member states.

In other words, employers and employees in the EU and EEA pay social security to their home country. The A1 certificate verifies which social security legislation applies to the holder of the form.

The A1 form is required in all EU countries, EEA countries and Switzerland. It allows workers to prove their current social security contributions so that they are not obligated to pay social insurance contributions elsewhere.

How do you obtain an A1 form?

Employers apply and obtain an A1 certificate on behalf of the employee from the home country’s social security authorities.

In order an A1 to be issued, the following conditions need to be met:

1. Applicability of the national legislation of the sending member state before the posting of the employee.

   The worker must have had social and health insurance.

   If the person is newly appointed and directly posted abroad and has been unemployed immediately before that, the minimum requirement is for them to be registered on the labour exchange and to receive unemployment benefits.

   If the unemployment benefit has expired, the person must pay their health insurance for the last 2 months before the secondment abroad and must submit a declaration to the National Revenue Service.

2. Usual activity of the employer in the sending country.

   The employer must normally operate in the territory of the sending EU member state, in this case Bulgaria.

   The percentage ratio of their realized turnover on the territory of Bulgaria to the total realized turnover, including the activity abroad, for the previous 12 months must not be less than 25%. Otherwise, it can be considered that the main activity of the employer is not in Bulgaria.

3. A contract between the employer and the posted worker.

   The employee and the employer need to have signed an employment contract, which is valid for the entire period of posting.

4. Prohibition to replace one posted worker with another.

5. Period of secondment no longer than 2 years.

   After 24 months, the seconded person must return to Bulgaria for a period of no less than two months before they can be seconded again for a new two-year period.

   According to the Bulgarian legislation, the assessment of whether these requirements are met is performed by the NRA. Each case is considered individually.

   Among those eligible to apply for an A1 form are the self-employed, as well as those whose profession involves travel such as cabin and ship crews, civil servants, and some exceptions.

   The A1 European certificate is not issued for persons who are inactive, i.e. do not have the status of employed or self-employed, or those who receive cash benefits (related to their activity as an employee or self-employed person).

Notifying the NRA

Every employer in Bulgaria who sends workers to other member states of the European Union is obliged to inform the competent territorial directorate of the NRA.

The A1 European certificate can be requested by the employer and / or the employee.

Upon receipt of the notification and fulfillment of the five mandatory requirements, the NRA should issue an A1 certificate for the applicable insurance legislation. The issuance takes 30 days, as long as the specified requirements are met.

Note that the A1 form is not a work permit. The employer can still send an employee to work for them on the territory of another EU member state without an A1 certificate. However, this would mean that the employee cannot remain subject to the Bulgarian legislation and for the respective period abroad, the insurance legislation of that host country would be applicable.

What documents do you need to obtain an A1 European certificate in Bulgaria?

You need to prepare and submit the following documents to receive an A1 form from the NRA:

1. A filled in application form for issuance of the A1 certificate;
2. A document of the company’s history with a turnover statement of at least 4 months to prove that the company is operational. (12 months if it is a newly registered company, with a turnover statement for at least 4 months);

3. Documents certifying that you have employees, of which at least 25% will remain on the territory of Bulgaria after the posting. These 25% do not include the positions of cleaner, secretary, office assistant, manager and other administrative staff. The documents proving this are:

   • Copies of their employment contracts,
   • Copies of their identity cards,
   • A reference under Art. 62 of the Labor Code from the National Revenue Agency that their employment contracts have been declared.
4. A copy of the business trip orders;
5. A copy of the contract with the foreign company, under which the employees are seconded. If it is not in Bulgarian, you need to provide a certified translation from a translation agency with the signature of a sworn translator and the company's seal. It is better to attach not a copy of the translation, but the original, together with a certified copy of the contract with a signature and "True to the original";
6. A contract for completed transactions with invoices (the sales are more important than the purchases). Accounting contracts and lease agreements are not recognized as authoritative. The transactions must have been made before the time of application for the A1 European certificate;
7. The accounting policy, a brief presentation of the company's activities or a letter from the manager about its activities and what it will do abroad with the signature and seal of the company. They do not have to be submitted together with the request for issuance of an A1 form, but may be required by the NRA.

These documents help the NRA to establish whether the employer usually operates in Bulgaria.

Conclusion

In order to avoid sanctions, make sure to check in advance whether your employees need to carry an A1 European certificate depending on the country they are going to and apply for its issuance on time.

If you need any help or a consultation with a good lawyer, contact us.