In recent years, support for the extension of 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 in many other countries for the reasons mentioned below. However, reaching agreements with many of these countries would likely reduce the burden on U.S. businesses, workers and beneficiaries. The International Association for Social Security (ISSA) is creating a database on international social security agreements. A first step includes information on existing social security agreements, including contracting states, the effective date, the duration of the reference period for seconded workers, the duration of insurance for the self-employed, the types of social security branches covered, as well as other references and links. In a second phase, the database will contain information about the operation. 2 An exception to this rule is the agreement with Italy, which allows some transferred workers to choose the social security system to which they are subject. No other U.S. totalization agreement contains a similar rule.
However, under tax law in many countries, an employer`s payment of a worker`s share in a social security contribution is considered a taxable allowance for the worker, which increases the worker`s income tax obligation. The tax equalization system generally provides that the employer also pays this additional income tax, which serves to further increase the worker`s taxable income and tax debt. The employer pays the extra tax again, etc., etc. For migrants subject to reciprocal agreement, contributions to social security authorities in the United Kingdom and the country of origin under the agreement are counted when determining the right to benefits payable by each country. The agreement contains detailed rules for different types of benefits and information on whether a worker is receiving benefits from the UK or his country of origin. In 1973, the Minister of Health, Education and Welfare, Caspar Weinberger, and his Italian counterpart signed the first U.S. totalization agreement. Although the Italian government quickly ratified the agreement as a treaty, Congress had not yet adopted an approval status; That is why the United States has not been able to implement the agreement. After much deliberation, Congress passed amendments to the Social Security Act in 1977, which contained an authorization law allowing the agreement with Italy to enter into force.12 workers exempt from US or foreign social security taxes as part of an agreement must document their exemption by obtaining a country`s coverage certificate that continues to cover it. For example, an American worker temporarily posted to the UK would need a SSA-issued coverage certificate to prove his exemption from UK social security contributions.
Conversely, a UK-based employee working temporarily in the Us would need a certificate from the British authorities to prove the exemption from the US Social Security Tax. Migrants sent to Britain on behalf of a country with which the UK has a bilateral social security agreement may not be required to pay social security contributions (NICs) in accordance with the terms of the agreement.