When working in multiple European Union (EU) countries simultaneously or going on a short-term assignment to another EU member state, it is essential to understand where social security contributions must be paid. To avoid double taxation and legal uncertainties, individuals must obtain an A1 Certificate. This document confirms that a person is subject to Latvia’s social security legislation and that all necessary social contributions continue to be made in Latvia, even if the work is physically performed in another EU country.
When Is the A1 Certificate Required?
The A1 Certificate is necessary in various situations where an individual works outside Latvia but wishes to maintain social security coverage in Latvia.
One of the most common cases is when an employee is temporarily posted to another EU country. If a Latvian company sends its employee to work in another EU country for up to 24 months but continues to pay social security contributions in Latvia, the A1 Certificate confirms that the employee remains insured under Latvia’s system.
Self-employed individuals who conduct business in Latvia but temporarily provide services abroad can also retain Latvian social security coverage by obtaining an A1 Certificate.
The certificate is also required for those who work in multiple EU countries simultaneously. For instance, if a person manages a business in Latvia but also provides services in another EU country, the A1 Certificate helps determine that Latvia remains the primary country of insurance. This is particularly important for international truck drivers, seafarers, and professionals working on short-term projects in different countries.
What Does the A1 Certificate Confirm?
The A1 Certificate determines where social security contributions should be paid. It confirms that an individual remains insured under Latvia’s social security system and does not need to register with another country’s social security system.
This is especially crucial when authorities in the country of employment require proof that social contributions are being made elsewhere. For example, in Germany, the Netherlands, or Finland, an employer may need to prove that their workers are already insured in another country. The A1 Certificate helps prevent unnecessary contributions and legal complications in such situations.
How to Obtain an A1 Certificate?
To obtain an A1 Certificate, an application must be submitted to the State Social Insurance Agency (VSAA).
If the certificate is needed for a posted worker, the employer is responsible for the application process. The company must provide a list of employees, signed contracts with clients in the EU country, employment contracts with the posted workers, and financial documents proving business operations in Latvia.
Self-employed individuals must submit an application specifying their business activities and provide evidence that they have conducted significant business operations in Latvia for at least two months before leaving. Additionally, they must demonstrate that their business will continue after their return, for example, by presenting proof of office maintenance, professional association memberships, or tax payments.
Applications can be submitted in several ways: in person at one of the VSAA service centers, electronically via the official e-address, or by mailing the required documents.
How Long Does It Take to Get an A1 Certificate?
VSAA typically processes the A1 Certificate within four weeks. However, in urgent cases, an expedited review can be requested by indicating this in the application. This option is especially useful if an employee needs to be posted abroad on short notice.
Key Points to Consider About the A1 Certificate
To keep the A1 Certificate valid, the employer must ensure that all social security contributions are made in compliance with Latvian regulations. If a company stops fulfilling these obligations or if the employee is no longer working in Latvia, VSAA has the right to revoke the certificate.
It is also essential to remember that labor authorities in the country of employment may conduct inspections, and failure to present an A1 Certificate may result in local authorities requiring social security registration and contributions in their country. This can lead to additional costs and administrative complications.
Why Is the A1 Certificate Important?
The A1 Certificate is not just a formality; it is an essential tool that protects both employers and employees. It prevents double payment of social contributions, eliminates legal risks, and confirms that a person remains insured under Latvia’s social security system.
Additionally, the A1 Certificate ensures that employees continue to accumulate pension rights, maintain health insurance coverage, and retain other social benefits in Latvia. Employers sending workers abroad should ensure the timely acquisition of this document to avoid potential problems.
If you need assistance in obtaining an A1 Certificate, BBCRiga provides full support in preparing and submitting the required documents, ensuring a fast and efficient process.
