The National Association of Foreign-BornSocial Security Treaties and Agreements to Avoid Dual Tax
Social Security Treaties Treaty Agreements Taxation Tax
Dual Social Security Taxation
Without some means of coordinating Social Security coverage, a worker from one country working in another country may be required to pay Social Security taxes to both countries on the same earnings.
When workers find themselves covered under the systems of two countries simultaneously for the same work, both countries generally require the employer to pay Social Security taxes as well. Dual Social Security tax liability is a widespread problem for U.S. multinational companies and their employees.
Social Security Treaties / Agreements
The United States has bilateral Social Security agreements / treaties with 17 countries to eliminate dual Social Security coverage and taxes for multinational companies and expatriate workers. They also help fill gaps in benefit protection for workers who have divided their careers between the United States and another country. The Social Security agreements aim to maintain the coverage of workers under the system of the country where they are likely to have the greatest attachment, both while working and after retirement.
An employee who would otherwise be covered by both the U.S. and a foreign system remains subject exclusively to the coverage laws of the country in which he or she is working. Each Social Security treaty / agreement (except the one with Italy) includes an exception for workers whose employers send them abroad on temporary assignment. Employees who are temporarily transferred to work for the same employer in another country, and whose assignments are expected to last 5 years or less, remain covered only by the country from which he or she has been sent. For specific details by country, see the table below.
Documentation
Workers who are exempt from U.S. or foreign Social Security taxes under a treaty agreement must document their exemption by obtaining a certificate of coverage from the country that will continue to cover them. When the other country issues a certificate certifying that the employee is covered by the foreign system, the employer can immediately stop withholding and paying U.S. Social Security taxes on the employee's earnings. The certificate should just be retained in the employer's files so it can be produced in the event the Internal Revenue Service ever questions why no taxes are being paid for the employee.
Employers generally are required to request certificates on behalf of employees they have transferred abroad; self-employed persons request their own certificate.
Benefit Protection
In addition, workers who have divided their careers between the United States and a foreign country sometimes fail to qualify for retirement, survivors or disability insurance benefits (pensions) from one or both countries because they have not worked long enough or recently enough to meet minimum eligibility requirements. Under a Social Security treaty agreement, such workers may qualify for partial U.S. or foreign benefits based on combined coverage credits from both countries.
People generally do not need to take action concerning benefits under a Social Security treaty agreement until they are ready to file a claim for retirement, survivors or disability benefits. A person who wishes to file a claim for benefits under a Social Security treaty agreement may do so at any Social Security office in the United States or the foreign country.
Contact Information
These agreements are extremely beneficial both to workers and employers, eliminating dual taxation of Social Security and helping workers or their surviving family members obtain payment of Social Security benefits to which they would not otherwise have become entitled. Companies with foreign operations may also significantly reduce their cost of doing business abroad.
A description, as well as the complete text, for each Social Security bilateral treaty is listed in the table below. For more information, see U.S. International Social Security Agreements, or write to:
SOCIAL SECURITY ADMINISTRATION
Office of International Programs
P.O. Box 17741
Baltimore, Maryland 21235
USA
You can also write to this address if you would like to request a certificate of U.S. Social Security coverage, or to suggest the negotiation of new agreements with specific countries. In developing its negotiating plans, the Social Security Administration gives considerable weight to the interest expressed by the workers and employers who will be affected by potential Social Security agreements.
For certificates of coverage from other countries, you will need to contact that country's social security agency. For a list of social security websites for many countries, see Other Countries' Social Security Agencies.
| U.S. Bilateral Social Security Agreements | ||
Austria |
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Belgium |
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Canada |
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Finland |
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France |
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Germany |
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Greece |
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Ireland |
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Italy |
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Luxembourg |
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Netherlands |
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Norway |
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Portugal |
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Spain |
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Sweden |
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Switzerland |
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United |
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