How the bilateral agreements program helps people who work in the U.S. and 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. Aggregation agreements protect the benefit rights of workers who divide their careers between the two countries by allowing each country to count periods of social security coverage acquired in the other country according to need, in order to create benefit entitlements. Periods of insurance are combined only for persons who have a certain degree of minimum coverage but who are not sufficient to fulfil the normal conditions of entitlement to benefits. In the United States, for example, workers born after 1928 who have never been disabled must generally collect 40 credits, called shifts (QCs), to qualify for a Social Security retirement pension5 If a person has acquired at least 6 QCs but less than 40, the aggregation agreements provide that the SSA has its working time in a partner country with a tabonization agreement during the determination of entitlement to the benefit. This is the first time I`ve done it. 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. A general misunderstanding about the U.S. agreements is that they allow doubly covered workers or their employers to choose the system to which they will contribute.
This is not the case. In addition, the agreements do not alter the basic rules for covering the social security legislation of the participating countries, such as. B those that define covered income or covered work. They exempt workers from coverage under the scheme of either country only if, otherwise, their work was covered by both schemes. To prove to the tax authorities of a host country that a worker is exempt from paying that country`s social security taxes, he or she must keep a certificate of coverage (or his employer) and present it if necessary. The certificate is a document issued by the country whose laws continue to apply to that person in accordance with the rules of the Convention. . . .