Source: https://www.ruskov-law.eu/bulgaria/article/issuance-of-attestation-a1-in-bulgaria.html
Timestamp: 2020-02-26 13:10:53
Document Index: 320255473

Matched Legal Cases: ['Art.12', 'Art. 88', 'Art. 89', 'Art. 90', 'Art. 91', 'Art. 92', 'Art. 11', 'Art. 21']

Issuance of attestation A1 in Bulgaria - Ruskov und Kollegen
Issuance of attestation A1 in Bulgaria
Ms. Desislava Ivanova is a HR and payroll accountant with English and German language in the Law Firm " Ruskov and Coll. " in Sofia, Bulgaria.
By: by Desislava Ivanova
Procedure for the issuance of attestation A1 in posting of workers from Bulgaria within the European Union.
Often clients are asking us the questions "How do I get my A1 Certificate?", "What documents do I need?", "Why does the NRA refuse to issue me an A1?" Unfortunately, the public information on these topics as well as the information from the Bulgarian National Revenue Agency (NRA) is in many cases controversial.
In accordance with the law of the European Union (EU) citizens of a country Member State of the EU have the right to move free and work within the Union without a work permit being required for that. In order to put this right into effect, the national social security systems of the EU Member States have been coordinated by Council Regulation (EEC) No 1408/71 and Council Regulation (EEC) No. 574/72, laying down the procedure for its implementation. As of 1st of May 2010 new coordinated Regulations related to the social security are applicable - namely Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009, which regulates the procedure for the implementation of the first Regulation.
In accordance with the principle of application of the provisions of a single member, provided by the new Regulations, applicable shall be the legislation of the member state, where the person exercises his labor activity or activity as self-employed. Regulation No 883/2004 determines as applicable the legislation of the Member State where the insurance instalments are due, including those for activities and income coming from other Member States. Special provisions, concerning the employees and self- employed persons temporary posted in another Member State are provided by Section II of the Regulation.
These rules provides, that employees and self- employed persons continue to be subject to the legislation of the posting country. In particular, Art.12 (1) of Regulation (EC) No 883/2004 states, that a person, who exercises an activity as employee in a Member State on behalf of an employer, which normally carries out its activities there and who is posted by that employer to another Member State to carry out labor activities on that employer's behalf, shall continue to be subject to the legislation of the first Member State, provided that the anticipated duration of such work does not exceed twenty-four months and that he/she is not sent to replace another employee. The main objective of the stipulations, introduced by these provisions, is to ease the free movement of employees and the free provision of services within the EU by avoiding administrative obstacles that may occur for the insured person, the employer and the institutions, if for a temporary period employment the law of the country where the employee is posted applies.
Interpretation No. 20-15-103 of 11.03.2011 on the Issuance of an A1 Certificate for Posting Workers in Germany, provided by the Bulgarian NRA, explains the requirements for maintaining of the applicable legislation of the posting Member State with regard to the employees, temporarily employed in another country, part of the EU. The Interpretation lists the following prerequisites:
The posted person shall be subjected to the legislation of the posting state, because of the fact that he/she carries out an activity as employee for and on behalf of the employer who is posting him;
The posting employer shall carry out its activity usually on the territory of the posting state;
Maintaining of direct relation between the employer and the posted person;
The anticipated duration of work shall not exceed 24 months;
The posted person shall not be sent to replace another person;
At least 2 months shall have been elapsed since the person's previous business trip to the EU.
With regards to the second requirement, Interpretation No 20-15-103 of the National Revenue Agency clarifies that certain criteria applies for establishing whether the posting employer carries out his usual activity on the territory of this Member State or not. In order to establish whether a said employed usually carries out his activity on the territory of a said state. Among these criteria are the seat and the registered address of the employer; the number of the employees in a given country (excluding the administrative staff); the location of the employment contracts and the labor law applicable to them; the location of the contracts concluded with clients and the applicable legislation; the total turnover realized by the company for the previous 12 months compared to that turnover, realized within the territory of the country; the number of the contracts executed within the posting country; the period during which the employer carried out an activity within the posting country . With regard to the mentioned criterion of turnover on the territory of the home Member State of the employer of origin, the absence thereof is deemed as lack of exercising of business activity within the territory of the posting country.
On the other hand, the NRA Interpretation adds that such a turnover in the home Member State of 25% of the total turnover for the preceding 12 months is a sufficient indicator for the ordinary course of business on the territory of the posting country.
Pursuant to Article 14 (10) of Regulation No 987/2009, the presumed future situation in the next 12 calendar months is also taken into consideration. For the enforcement of the law of the home Member State in the cases referred to in Article 12 (1) of Regulation / EC / No 883/2004, it is necessary to issue an A1 certificate for the applicable legislation on the basis of Art. 88-90 of the Bulgarian Tax and Social Security Procedure Code (TSSPC). According to Art. 89 of TSSPC the document is issued at a request of the interested person, submitted to the competent directorate electronically or through a licensed or registered postal operator. The request shall be submitted according to the approved form /OKD-236/. The relevant written evidences, required for the issuance of the A1 Certificate, shall be attached to the request, as follows:
Copy of the ID card of the posted employee;
Copy of the additional agreement - According to the new Ordinance for the terms and conditions for posting of employees within the framework of the provision of services (Official Gazette, issue 2 of January 6, 2017), the posting shall be provided by an additional written agreement for changing the of employment for the duration of the posting;
Copy of the employment contract with the employee, as well as any additional agreements thereto;
A copy of the contract with the foreign company under which the employee is posted, as well as a legalized translation of this contract;
Financial reports for the realized turnover for the last 12 months;
Additional Data related to the company's activity and/or a turnover sheet may also be requested.
As e result of this procedure an A1 certificate for the applicable legislation is being issued or not. Provided that the procedure for the submission of the application was kept, Art. 90 (2) of the TSSPC provides that the document shall be issued within a 30-days term since the submission of the request, unless a shorter deadline is provided or if the request is not submitted through another territorial agency, in which case the deadline for issuing the certificate is 45 days since the submission of the request.
If the mandatory requirements for issuing of A1 Certificate are not met, the relevant administrative body rejects the request. According to Art. 91 of DOPK the rejection to issue the requested document shall be notified within 7 days as of its issuance, the non-pronouncement of shall be considered as tacit refusal. According to Art. 92 - 97 of the TSCC the rejection could be subject of further court appeal, where the decision of the administrative court is final.
The certificate shall be received at the relevant territorial agency where the request was submitted or at the corresponding address of the employee, if such was previously provided. The Certificate is compulsory served in Latin, where a copy in Bulgarian language is also possible to be provided. The document certifies that for a period of up to 24 months, the for the person, posted within another EU Member State, the Bulgarian social security law provisions still apply.
As the NRA Interpretation No. 20-15-103 states, the A1 certificate shall not be deemed as a work permit for another EU Member State, as well as the rejection for its issuance does not mean that the employer cannot send the relevant employee to work on his behalf within the territory of another Member State. It only stipulated, that the Bulgarian social security legislation would not apply for the latter. As a result of that, the basic rule of Art. 11 (3) (a) of Regulation / EC / No 883/2004 becomes applicable. In practice, this means that the legislation of that Member State and its social security system is applicable to a person pursuing an activity as an employed or self-employed person in a this Member State. In this case different consequences occur for the employers. In accordance with the provision of Art. 21 of Regulation / EC / No 987/2009 an employer, whose registered office or place of business is outside the competent Member State, fulfils all the obligations arising from the legislation applicable to that employee, in particular the obligation to pay the social security contributions provided for in that legislation, as if they had their registered office or place of business in the competent Member State. The provision provides for an option for negotiation between the employer and the employee, according to which the employer is obliged to fulfil the obligations of the employer to pay social security contributions on his behalf. In the case of such agreement, the employer shall send a notice of this arrangement to the relevant institution of that Member State.
In connection with this article, we would like to draw your attention to the following:
We, as a law firm, do not issue A1 Certificate. This is entirely upon the discretion of the National Revenue Agency.
We do not advise on the terms, modalities and the necessary documents for the issuance of Certificate A1. We ask you to contact the National Revenue Agency directly on this matter.
We do not represent clients to the NRA as part of the A1 certification process. Any interested person can apply by itself for an A1 Certificate and to obtain such, in case he/she meet the necessary requirements.
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