Preshranicni prace na dalku nove dohody s Rakouskem a Nemeckem

Cross-border teleworking - new agreements with Austria and Germany

We have already reported on the new recommendations adopted at EU level to determine the country of compulsory social security for employees who work remotely abroad (HERE). The recommendations aim to simplify the conditions for teleworking by expanding the group of employees who can work for their foreign employer from their country of residence without incurring additional administrative costs for the employer in terms of registration and payment of insurance contributions in another country.

In line with these recommendations, the Czech Republic has concluded follow-up framework agreements with Austria and Germany with effect from 1 March 2023. The agreements cover situations where an employee works remotely in his/her country of residence (e.g. from the Czech Republic) between 25% and 40% of his/her total activity but wishes (or it is in his/her interest) to remain insured in the country of seat of his/her employer (e.g. Austria).

In this case, the employee has the possibility to apply for an A1 certificate in the country of seat of the employer in accordance with Article 16 (so-called exemption) for a maximum period of two years (the application can be filed repeatedly). Provided that other conditions are met, the person will now be legally entitled to an exemption (i.e. the exemption should be automatically granted). In practice, this could also speed up the overall process of issuing an A1 certificate in these cases. Until now, the granting of an Article 16 exemption has always been subject to the approval of the institutions of both countries, and the issuing of an A1 certificate therefore usually takes six months or longer.

However, if the employee works remotely less than 25% or more than 40% in his/her country of residence, the framework agreements will not apply and the standard procedures under the relevant EU Regulation will apply. In the case of a request for an Article 16 derogation, its granting will be subject to the approval of the institutions of both countries. 

In addition to the scope of the activity, the framework agreements set out additional conditions that must be met in order to benefit from the simplified regime. One of them is the existence of only one employer. Persons who have more than one employer, or who are self-employed in addition to their employment (including, for example, income generation through internet platforms), cannot benefit from the provisions of the framework agreements. Similarly, the agreements do not apply to situations where the cross-border telework involves a country other than the Czech Republic and Austria or Germany.  

Further information, including practical examples, can be found on the Czech Social Security Administration (CSSA) website HERE. The CSSA has not yet disclosed whether similar agreements will be concluded with other EU countries.

If you have any questions, please contact the authors of this article or the EY team you are working with.

Authors:

Radka Růžičková

Lucia Němečková