Bilateral Social Security (Totalization) Agreements

Posted by on Sep 12, 2021 in Uncategorized | No Comments

The general principle of all totalization agreements is that if everything else is the same, a worker should pay taxes and should only be covered by the social security system of the country in which he or she actually works. This simple rule is called the territoriality rule, which means that the territory in which a person works determines their tax debt. All other provisions relating to the coverage of aggregation agreements are exceptions to this basic rule. The agreements also have positive effects on the profitability and competitive position of companies with foreign activities by reducing their operating costs abroad. Companies that have expatriate staff are encouraged to use these agreements to reduce their tax burden. Although social security agreements vary in terms of coverage, their intent is similar depending on the terms agreed by the two signatories. The main objective of such an agreement is to eliminate the double social security contributions incurred when a worker from one country works in another country and is required to pay social security contributions to both countries whose income is the same. You can also write to this address if you wish to propose the negotiation of new agreements with certain countries. In drawing up its bargaining plans, the SSA attaches great importance to the interests of workers and employers who will be affected by possible agreements. A number of factors determine the nature of the social security contributions to be paid by employers and workers, as well as their respective monetary consequences. (Figure 1 below shows some examples of different rates for survey income.) If you have any questions about international social security conventions, call the Social Security Administration`s Office of International Programs at 410-965-3322 or 410-965-7306. However, please do not call these numbers if you wish to inquire about an individual entitlement to benefits. In 1977, labor immigration patterns were very different from those of 2018, and most U.S.

trade and multinational relations then focused on Western Europe. Therefore, Article 233 was adapted to the social security systems of the time in Western Europe. The first two agreements concluded by the United States with Italy and West Germany preceded the adoption of Section 233. That is why this scheme has been designed taking into account the social security systems of these two countries, which have already been subject to control. Both countries had traditional pay-as-you-go bismarck systems covering virtually their entire workforce. . . .

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