International employment and social security: A1 form of little value?

The Court of Justice has recently judged that a judge can disregard the A1 form in case of fraud. However, the binding legal force of the A1 form is not undermined. So it is still important to ask for the A1 form.

International employment and social security

Employing employees abroad leads to many questions. In which country must taxes be paid? Must the employment contract be adapted? What about social security? You must work your way through the big tangle of international treaties and European regulations.

Possibly, the European social security rules governing the applicable law are among the most transparent ones. Social security must be paid in the country you work in, except when the employment is temporary (posting). When working in different countries at the same time, a specific rule applies. Anyway, social security is paid in just one EU member state.

The role and binding force of the A1 form

These uniform rules (Regulation 883/2004) offer extra security thanks to the A1 form. The A1 form must be requested by the employee or the employer in the home country. It proves that only the home country is authorized to collect social security contributions. Another EU member state cannot claim contributions. This is the binding force of the A1 form.

What in case of fraud?

The binding legal force of the A1 form is not absolute. That is shown by a recent ruling of the Court of Justice (case C-359/16, Altun).

A EU member state can disregard the A1 form and collect social security contributions when it turns out that the employer has deliberately misrepresented the facts or withheld relevant information during the application period.

The A1 form is still a must. The inspection services must not only prove that facts were deliberately misrepresented or that information was withheld. According to the Court of Justice the employer must also be given the chance to demonstrate that no fraud was committed.

What you can do now

• It remains important to ask for the A1 form. Partena Professional can help you with this.
• Prepare yourself and make a realistic estimate of the future employment situation. In what countries will the employee work? Maybe a posting is a simultaneous employment? How will the employee be connected to the host company? Maybe a local employment contract fits the reality better than a posting.
• Also alert the employee to the impact of his choices on his private life. Sidelines, how innocent as they may seem, or moving houses can be of great influence.
• As the number of international employees grows, it becomes more important to check at random whether the A1 form corresponds to the actual employment situation.

More information?

Mail to taxandlegalpartners@partena.be.

Author: Yves Stox

26/02/2018