POSTING OF INTERNATIONAL DRIVERS WITH A1 CERTIFICATE

Posting of International Drivers with A1 Certificate for Applicable Social Security Legislation, on the Territory of EU and EEA Member States, including France, Germany, Belgium, and Austria?

Case of posting international drivers with an A1 certificate: If a Bulgarian legal entity employer has employees appointed as international drivers, who are to be posted as international drivers with an A1 certificate for up to 2 years in an EU member state, the issue of their insurance falls under the scope of  Regulation 883/2004.

The new practice for  posting international drivers with an A1 certificate in Austria and what it leads to

First, we must mention what has been happening recently. For posting international drivers on the territory of Austria, obtaining an A1 certificate is mandatory. It concerns the insurance. Since the A1 certificate for applicable social security legislation is issued for the whole route, it cannot be requested for a single country, i.e., Austria. Therefore, every posted international driver will need to have an A1 certificate for applicable legislation. It lists all the countries the international driver's route crosses.

The case described above is an exception to the main rule. Why? These workers are not registered as "residing" in a particular EU member state. Instead, they travel through various countries along a route. This leads to differences in requirements for this class of workers and employees (international drivers).

Requirements for  posting international drivers with an A1 certificate  according to the regulation:

First requirement: Before the international driver is posted, their relations regarding their insurance must adhere to Bulgarian law. In this case, Bulgaria is the posting country.

Second requirement is the usual "residence" of the employer. The posting employer must usually conduct its activities on the territory of Bulgaria.

Third important condition  for applying Article 12(1) of  Regulation (EC) No 883/2004  is maintaining a direct link between the employer and the posted person.

Fourth, it is required that the person is not sent to replace another posted person.

Fifth, the anticipated duration of the posted person's work must not exceed 24 months.

Posting  international drivers with an A1 certificate  for applicable social security law from the point of view of the NRA

In cases of posting with the purpose of posting international drivers with an A1 certificate under Bulgarian legislation, the NRA makes an assessment. The assessment is based on convenience and legality. It encompasses the fulfillment of all conditions regarding determining the applicable law. It is conducted by the competent institution of the sending member state, which in our case is the NRA.

The NRA monitors compliance with Regulation 883/2004. Posting and insuring international drivers with an A1 certificate, in particular, is carried out according to specific criteria. They must be present at the time of posting. I enumerate the most important ones.

-        The employer must have a valid transport license.

-        International drivers must be appointed as second category labor.

-        The request must be addressed to the correct branch of the NRA according to the driver's place of residence.

-        There must be an order for posting. There should be clarity on the question of which countries the international driver will pass through.

This is a particular case of posting international drivers with an A1 certificate. This is so because the main activity of such companies is most often international transport. Therefore, it is not required to have income from Bulgaria amounting to at least 25%. The same applies to the ratio of posted staff. The ratio of up to 75% of posted and insured international drivers with an A1 certificate is not monitored.

We add an image of an example of a posting of an international driver.

Some features should be noted when posting international drivers with an A1 certificate.

Other features for  posting international drivers with an A1 certificate, taxation of individuals, and registration with migration services in different member states

1. From the perspective of migration regime

Firstly, I emphasize that EU citizens have the right to be appointed under labor contracts in Bulgaria. The same applies to people with permanent and long-term residence cards. Permanent and long-term residence is not citizenship.

If the mentioned individuals are only citizens of third non-member countries, they are neither citizens of Bulgaria nor the EU. This happens when you appoint an international driver with an A1 certificate as a temporarily or permanently resident of a non-member state. For example, a Serb, Macedonian, Albanian, etc.

By posting a non-European, you may violate local legislation in the country through which this person passes. This concerns visa regime violations, allowable stay in that country, and similar issues. In this case, the posted worker may be detained by local authorities in that state.

Therefore, it is good to know the maximum allowable stay in member states through which the routes pass. If the stay of a non-European international driver will be longer than the regulated by law, necessary registrations should be made in advance. It might eventually be required for the international driver to apply for the correct type of visa (commonly Visa D).

2. From the perspective of the taxation of posted individuals

Secondly, I wish to draw attention to a potential issue with withholding and paying taxes. According to applicable law in Bulgaria, the employer withholds and pays the income tax for the individual - worker. Accordingly, the employer has 3 obligations:

1) To calculate it.

2) To declare it to the NRA authorities.

3) To withhold and pay it on behalf of the worker.

A1 is a certificate concerning applicable insurance law - health, social, pension. The A1 certificate does not pertain to the income tax (PIT) of posted individuals.

For withholding and paying taxes for each posted person, Tax Treaties are applied. Agreements for the avoidance of double taxation exist between Bulgaria and almost all individual states. This means that you must first familiarize yourself with the legal framework concerning your specific case. 

Once you are familiar with the applicable law, you must file an application with the NRA to avoid double taxation. Based on the decision of the Taxation Directorate, you will change the records in Declarations 1 and 6 regarding the withheld PIT for posted persons. Thus, the declaration will not include income tax or PIT.

If regulated in the Tax Treaties that PIT is payable in the host country, these are the initial steps to be taken with the sending of the posted individuals.

Next, it is good to keep in mind that in some countries, income tax is paid at the end of the year. In Bulgaria, it is declared and paid monthly. To conduct a procedure under the Tax Treaties, you may need to provide proof of withheld and paid tax abroad.

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Sincerely,

The Vesta Consult Team