We are frequently approached by employers with questions regarding the issuance of an A1 certificate when posting employees to other European Union countries. What are the requirements for issuance, what documents must be submitted to the National Tax Authority (NAP), and what are the consequences of a refusal?
To answer these questions, a distinction must be made between the regulations on the coordination of social security systems within the EU and the national regulations governing the posting of workers and working conditions in the host country.

What is the A1 certificate?

The A1 certificate confirms which national social security legislation applies to a specific person during a specific period. Its primary purpose is to determine in which country mandatory social security contributions must be paid when a person pursues a professional activity in more than one country or works temporarily outside the country where they are normally insured. The rules for determining the applicable legislation are set out in Regulation (EC) No 883/2004 on the coordination of social security systems and in Regulation (EC) No 987/2009, which lays down the procedure for its implementation.
A fundamental principle of these regulations is that, as a general rule, the legislation of only one Member State applies to a person. This is intended to prevent a person from being subject to multiple social security systems simultaneously and to avoid dual insurance obligations. It is important to note that the A1 certificate does not constitute a work permit. Its issuance does not exempt the employer from the obligation to comply with applicable regulations regarding posting, remuneration, working conditions, and the notification of competent authorities in the host country.

Under what conditions is an A1 certificate issued for a posting?

The essential conditions for maintaining the social security legislation of the sending state during the temporary posting of an employee to another Member State are set out in Article 12(1) of Regulation (EC) No 883/2004. Under this provision, a person employed in a Member State by an employer that normally carries out its activities there, and who is posted by that employer to another Member State to perform work on its behalf, may remain subject to the legislation of the first state, provided that the anticipated duration of the work does not exceed 24 months and the person is not sent to replace another posted person.
For this rule to apply, several fundamental conditions must be met. There must be a genuine employment relationship between the employer and the employee that is maintained throughout the posting period. The employer must normally carry out substantial activity in the state from which the employee is posted, and the posting must be temporary and not for the purpose of replacing another posted person.
The fact that the company is registered in Bulgaria is not sufficient in itself. The assessment takes into account the employer's actual activity, the organization of work, and other relevant circumstances. Regulation No 987/2009 expressly stipulates that it must be verified whether the employer carries out substantial activity—beyond purely internal administrative tasks—in the state where it is established.

Secondment of newly hired employees

An A1 certificate may also be issued for an employee who was hired immediately prior to being posted to another Member State. Under Article 14(1) of Regulation (EC) No 987/2009, the rules on posting may also apply to a person recruited for the purpose of being posted to another Member State, provided that the legislation of the State where the employer is established already applied to them immediately before the start of employment.
There is no requirement for the person to have worked in Bulgaria for a specific minimum period. The CJEU takes the view that it is not necessary for the person to have been covered by the social security system in Bulgaria immediately prior to recruitment; other circumstances may also be relevant, such as their habitual residence in Bulgaria.
Consequently, the mere conclusion of an employment contract immediately before the posting is insufficient, yet it is also not required that the person has previously worked for the Bulgarian employer for a specific period. The specific circumstances must be examined to determine whether the person was subject to Bulgarian law at the relevant time.

How is the application for an A1 certificate submitted?

When posting an employee, form OKD-236 must be submitted; this serves as both an application for an A1 certificate and a notification to the competent authority pursuant to Article 15 of Regulation (EC) No 987/2009. For persons who habitually work as employees in two or more Member States, form OKD-237 is used, in accordance with the procedure set out in Article 16 of Regulation (EC) No 987/2009. Documents may be submitted electronically via the National Tax Authority (NAP) electronic services using a qualified electronic signature, via the secure electronic delivery system (SSEV), or in paper form in accordance with applicable regulations.
When completing the form, it is important to correctly identify the applicable scenario, as the rules for a temporary posting under Article 12 differ from those governing the habitual pursuit of an activity in two or more Member States under Article 13.

What documents are required?

The application must be accompanied by the documents and information necessary to establish the circumstances upon which the determination of applicable social security regulations depends. Depending on the specific case, requirements may include the employment contract and associated supplementary agreements, documentation regarding the posting, information on the employer's business activities in Bulgaria, contracts with foreign business partners, and details concerning the work to be performed and turnover generated over the preceding 12 months.
The National Revenue Agency (NAP) may request additional evidence if the submitted documents are insufficient to establish the relevant facts. Consequently, it cannot be assumed that the same set of mandatory documents applies to every application. From a practical standpoint, it is advisable for the employer to prepare, in advance, documentation evidencing both their actual business operations in Bulgaria and the nature and temporary duration of the work the employee is to perform in the host country.

Within what timeframe is the A1 certificate issued?

The National Revenue Agency (NAP) decides on the application within the applicable administrative timeframe. In practice, the standard period for issuing the certificate is 30 days; therefore, the employer should factor in the time required for processing the documents and potentially submitting additional information.
It is important to note that submitting an application does not guarantee the issuance of the A1 certificate. Following a review, the competent authority may issue the certificate or issue a reasoned refusal.

What happens if the Bulgarian National Revenue Agency (NAP) refuses to issue an A1 certificate?

A refusal to issue an A1 certificate does not automatically mean that the employee is not entitled to work in the country concerned. Rather, it means that, under the stated circumstances, no grounds were found for maintaining the application of Bulgarian social security legislation. In this case, the applicable legislation must be determined in accordance with the general provisions of Regulation (EC) No 883/2004. Unless a special rule applies, the legislation of the Member State where the person is employed generally applies.
This may result in additional obligations for the employer in the host state, including registration with the competent authorities and the payment of social security contributions in accordance with local legislation.

A1 Certificate for employment in two or more Member States

A distinction must be made between the temporary posting of an employee to another country and cases where a person habitually pursues an occupational activity in two or more Member States. The provisions of Article 13 of Regulation (EC) No 883/2004 apply to the latter case. Determining the applicable legislation depends on the specific organization of the work activity, the person's place of residence, the nature of the activity performed, and other applicable criteria.
Such cases may arise, for example, with employees who regularly work in several countries, including certain forms of cross-border telework. Given the differences between these two scenarios, it is important—when preparing the documentation—to determine whether the situation involves a posting under Article 12 or the habitual pursuit of an activity in several states under Article 13 of Regulation (EC) No 883/2004. The appropriate form—OKD-236 or OKD-237—must be used depending on the case.

Is an A1 certificate required for short-term business trips?

The short duration of the trip alone is not sufficient to assume that an A1 certificate is not required. Factors such as the nature of the activity performed, the country where it is carried out, and the regulations applicable to the specific case must be taken into account. In the case of routine business trips—such as those involving a client meeting, seminar, conference, or training session—the situation may not constitute a posting within the meaning of Article 12 of Regulation (EC) No 883/2004. However, this does not automatically mean that the regulations regarding the determination and certification of applicable social security rules do not apply. Therefore, employers should check before the trip whether an A1 certificate is required, rather than assuming that the short duration of the stay alone exempts them from the relevant requirements.