Workers who have shared their careers between the United States and a foreign country are sometimes not entitled to retirement, survivors` or disability benefits (pensions) from one or both countries because they have not worked long enough or recently enough to meet the minimum requirements. Under an agreement, these workers may be entitled to partially U.S. or foreign benefits based on combined or “added” coverage credits from both countries. In general, persons are not obliged to take measures with regard to aggregation benefits under an agreement until they are prepared to apply for a pension, survivor`s or invalidity. A person wishing to claim benefits under a tabling agreement may do so with any social security service in the United States or abroad. Although the agreements with Belgium, France, Germany, Italy and Japan do not use the residence rule as the primary determinant of coverage of self-employment, each of them contains a provision guaranteeing that workers are insured and taxed in only one country. For more information on these agreements, click here on our website or by writing to the Social Security Administration (SSA) in the “Conclusion” section below. In recent years, support for extending the geographical scope of totalisation agreements has increased beyond the current concentration in Europe. The United States has agreements with several non-European countries, but the nature of the authorisation status has limited negotiations for many other reasons discussed below. However, reaching agreements with many of these countries would likely reduce existing burdens for U.S. businesses, workers, and beneficiaries. However, according to the tax legislation of many countries, the payment by an employer of a worker`s share in a social security contribution is considered taxable compensation of the worker, which increases the worker`s income tax debt.
Fiscal equalization generally provides that the employer also pays this additional income tax, which, in turn, further increases the worker`s taxable income and tax debt. The employer in turn pays the additional tax, etc. The most notable exception to the territoriality rule is called the posting rule. Under this rule, a worker whose employer requires temporary relocation from one country to another to work for the same company continues to pay social security taxes and retains coverage only in the country from which he or she transferred.1 After almost all aggregation agreements, such a transfer cannot be expected – at the time of transfer, beyond 5 years. This rule ensures that workers who only work temporarily in the other country retain coverage in their home country, which remains the country of their greatest economic link2. .