What Is Portable Document A1 and What Is It Needed For?
If an employee were to work abroad, he or she would in principle be required to pay social security contributions to two countries: first, to Germany, and, secondly, to the foreign country. To avoid these sorts of double contributions, the EU has issued regulations to make it so that only the home country’s provisions have prima facie effect when workers are posted abroad. Portable Document A1 serves as evidence for employees being subject to social security regulations in one Member State, meaning that social security contributions do not need to be paid abroad in another Member State.
When Do Employees Need Portable Document A1?
Portable Document A1 must be applied for each time an employee is posted to another Member State. A foreign posting involves an employee liable for social security contributions in Germany occasionally working in another Member State for his or her employer. This posting may last up to 24 months. Legislation does not provide any leeway for postings that are only for a brief period of time (i.e. for business travel). Portable Document A1 therefore must normally be applied for each time an employee crosses the border for work reasons (even if it is for a short period of time).
Who Needs to Apply for Portable Document A1 and Where?
Portable Document A1 must be applied for on behalf of each person carrying out part of their paid employment duties in another Member State.
Where the application is lodged depends on whether the employee’s health insurance is public or private.
Employees insured publicly must have their application submitted to their insurer. For privately insured employees, on the other hand, the application must be submitted to Deutsche Rentenversicherung Bund, the federal pensions authority. The Datenstelle der Rentenversicherung (DSRV), its data processing arm, is responsible here. Meanwhile, privately insured employees with a pension managed by a professional association have their applications processed by the Arbeitsgemeinschaft der Berufsständischen Versorgungseinrichtungen (ABV), the consortium of professional pension schemes of the liberal professions in Germany. Such applications must be addressed to the Datenstelle für berufsständische Versorgungseinrichtungen (DASBV), the data processing arm of the ABV.
How Must Applications Be Lodged and How Long Does It Take?
Applications have been subject to an electronic filing requirement since January 1, 2019 (though there is a transitional period until June 30, 2019 during which applications may be submitted in writing in special, individual cases). Applications may be lodged directly using payroll software.
The employer should then receive the requested Portable Document A1 within three days. However, this three-day period is not counted from the time of application, but rather from when the relevant authority has decided, based on its analysis of relevant information, that the foreign posting requirements have been met. Applicants should reckon with a processing time of approximately two weeks at the moment.
What Consequences Are There for Business Travel without Portable Document A1?
If an employee is not carrying their Portable Document A1 during business travel, that may lead to a denial of access to business premises or trade fair grounds, for example. Furthermore, he or she may be forced to pay local social security contributions. A penalty or fine may also be issued. What’s more, some countries only grant accident insurance benefits for workplace accidents on presentation of a European Health Insurance card and Portable Document A1.
Can Portable Document A1 Also Be Applied for Retroactively?
The European Commission has advised that there is a requirement to apply for and carry Portable Document A1 even for short postings abroad. However, it is also of the view that fines should not be issued if, in the individual circumstances, it can be proved that the document could not be applied for in time for good reason or that the document was already applied for but the relevant authority had not yet issued it. Nevertheless, in Belgium, France, Austria, and Switzerland in particular, there have already been difficulties with inspection authorities when Portable Document A1 was not able to be presented.
For this reason, it is recommended to apply in advance and carry Portable Document A1 during business travel.
»Long-Term Portable Document A1« for Regular Activity in Multiple Member States
If an employee works in at least one other country in addition to Germany, an application can be lodged with the Deutsche Verbindungsstelle Krankenversicherung Ausland (DVKA), an international social security liaison office, for a long-term Portable Document A1 (Dauerbescheinigung). To qualify for this version of the Portable Document, an employee must regularly carry out his or her work activity on a recurring basis in the relevant Member State at least one day per month or at least five days perquarter. The Portable Document can be requested for each Member State in which the employee regularly works in line with the above definition. As with the regular Portable Document A1, it is not possible to issue a general Portable Document valid in all Member States. The »long-term« Portable Document A1 is usually issued for a period of one year.
Companies should establish an internal process that ensures that Portable Document A1 is applied for and provided to the employee before commencing business travel abroad. To do this, companies should establish an interface between their payroll division (which is responsible for the application through its payroll software) and the person responsible for planning and approving business travel. For business travel at very late notice, companies may also apply for Portable Document A1 after traveling. However, it should be noted that doing this may lead to problems when inspected abroad and, in certain cases, require considerable effort to provide valid justification as to why it was not possible to apply for the document in advance. If Portable Document A1 has not been issued in time prior to the business travel, the employee should at least be provided with the application submission receipt.
We are more than happy to help you with all the steps required so that you are in the best possible position with regard to Portable Document A1.