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US TURKEY SOCIAL SECURITY AGREEMENT

March 5, 2022 admin

The dual purpose of tabulation agreements is fulfilled in different ways in
different agreements, making it imperative to understand the concept and
specifications of each individual hosting agreement. Many tabulation agreements
follow the same general pattern of contribution and time requirements. Below is
a description of the types of agreements concluded by certain countries. **
Spain and Portugal are covered both by a bilateral agreement and by the social
security treaty of the Ibero-American Organization. The SSA counts, within the
framework of a table agreement, the periods of insurance that the employee has
acquired under the social security program of a contracting country. Similarly,
a country that is party to an agreement with the United States will consider
covering an employee under the U.S. program if necessary to qualify for that
country`s social security benefits. If the combined credits in both countries
allow the employee to meet the eligibility criteria, a partial benefit may be
paid based on the proportion of the employee`s total career completed in the
paying country. The goal of all the United States. Aggregation agreements aim to
eliminate dual social and tax coverage while maintaining coverage for as many
workers as possible in the system of the country where they are likely to be
most connected, both at work and after retirement.

Each agreement aims to achieve this objective through a set of objective rules.
Any foreigner who wishes to apply for an exemption from U.S. aggregation
agreements under a tabulation agreement protects the benefit rights of workers
who share their careers between the two countries by allowing each country to
count periods of social security coverage acquired in the other country as
needed to establish entitlement to benefits. Periods of coverage are combined
only for persons who have some minimum coverage but who are not sufficient to
meet the normal conditions for entitlement to benefits. In the United States,
for example, workers born after 1928 who have never been disabled are generally
required to purchase 40 credits, called coverage quarters (QC), in order to be
eligible for a Social Security pension benefit.5 If a person has purchased at
least 6 QC but less than 40 QC, aggregation agreements provide that they must
have their working hours in a partner country with a tabulation agreement at the
time of the determination of the entitlement to benefits is taken into account.
Since the late 1970s, the United States has established a network of bilateral
social security agreements that coordinate the U.S. social security program with
comparable programs in other countries. This article gives a brief overview of
the agreements and should be of particular interest to multinational companies
and people working abroad during their careers.

To date, the United States has entered into tabulation agreements with 28
countries; 3 additional agreements have been signed but are not yet in force. A
list of all tabulation agreements can be found in Appendix C. Eu rules apply to
all EU member states, so if there are bilateral agreements, they are not
mentioned here. The enabling law contained in the 1977 amendments is section 233
of the Social Security Act (42 U.S.C§ 433),13 which allows the president to
enter into bilateral tabulation agreements with countries that have a social
security system similar to that of the United States. Section 233 establishes
totalization agreements as agreements between Congress and the executive branch
that have essentially the same legislative force as treaties, but do not require
full ratification by the Senate. For an agreement to enter into force, the
President must submit it to Congress, where he must rest for 60 days before both
chambers, during which one or both chambers meet; this period must elapse
without either House adopting a resolution of disapproval. Totalization
agreements are popular with U.S. companies because they exempt employers from
double Social Security taxes.

According to a regular study of net tax savings conducted by the Social Security
Administration`s (SSA) Office of International Programs, U.S. companies and
their employees save about $1.5 billion in foreign taxes on Social Security each
year through the agreements. Such tax cuts help make U.S. operations more
profitable around the world while improving the competitiveness of U.S. trade.
The totalization agreements also exempt foreign workers who are temporarily sent
to the United States from paying U.S. social security taxes. This translates
into annual savings of approximately $500 million for affected foreign workers
and their employers.

These tax savings make the United States a more attractive destination for
foreign capital, encouraging foreign direct investment. In 1977, labor migration
patterns differed significantly from those of 2018, and most U.S. multinational
trade and business relationships at the time were concentrated in Western
Europe. As a result, Article 233 was adapted to the social security systems of
Western Europe at the time. The first two agreements signed by the United States
with Italy and West Germany preceded the adoption of Article 233. This scheme
was therefore designed in the light of the social security systems of these two
countries. Both countries had traditional Bismarck pay-as-you-go systems that
covered virtually their entire workforce. Article 233 provides that the
President may conclude totalization agreements only with countries with
universal social security systems that provide for regular benefits or the
actuarial equivalent thereof on account of old age, disability or death.  2 An
exception to this rule is the agreement with Italy, which allows certain
transferred workers to choose the social security system under which they will
fall. No other U.S. tabulation agreement contains a similar rule.

Workers who are exempt from the host country`s social security contributions
under a aggregation agreement must document their exemption by obtaining a
certificate of coverage from the country that continues to cover them. This last
point concerns multinational organisations that compensate for social security –
i.e. minimise the expatriate`s financial gain or loss due to the unique
consequences of an international mission – and therefore have an additional
financial burden if they fulfil the employee`s social security obligation in the
host country as part of its expatriation policy. In addition, the tax
legislation of the host country may consider such a payment by the employer as
taxable compensation to the transferee – which further increases the overall
financial burden of the company. In situations where there is no aggregation
agreement between the two countries, additional costs may be incurred by the
employer. These additional costs are as follows: Although the agreements with
Belgium, France, Germany, Italy and Japan do not use the residence rule as the
main determinant of self-employment coverage, each of them contains a provision
guaranteeing that employees are insured and taxed in a single country. For more
information about these agreements, please visit our website here or write to
the Social Security Administration (SSA) in the Closing section below. Workers
who have split their careers between the United States and another country may
not be eligible for retirement, survivor, or disability insurance (pensions)
benefits from either or both countries because they have not worked long enough
or recently enough to meet the minimum eligibility criteria. Under an agreement,
these workers may be eligible for U.S. or foreign partial benefits based on
combined or “totalized” coverage credits from both countries. In order to prove
to the tax authorities of a host country that an employee is exempt from paying
social security taxes in that country, he (or his employer) must keep a
certificate of coverage and, if necessary, present it. The certificate is a
document issued by the country whose laws continue to apply to that person in
accordance with the rules of the agreement.

The agreements designate the bodies responsible for issuing these certificates
in each country. Each agreement (with the exception of the agreement with Italy)
contains an exception to the territoriality rule, which aims to minimise
disruption to the careers of workers whose employers temporarily post them
abroad. Under this exemption for “freelancers”, a person who is temporarily
transferred to work for the same employer in another country remains insured
only in the country from which he or she was posted. For example, a U.S. citizen
or resident who is temporarily transferred by a U.S. employer to work in a
contracted country will continue to be covered by the U.S. program and will be
exempt from coverage of the host country`s system. The employee and employer
only pay contributions in the United States…


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ABOUT

Peter Dreier has been involved in urban policy as a scholar, a government
official, a journalist, and an advocate for reform for more than three decades.
He has written widely on American politics and public policy, specializing in
urban politics and policy, housing policy, community development, and community
organizing. Read More.


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