Jo Anne Barnhart, European Commissioner for Social Security, today signed an agreement with Dr Santiago Levy Algazi, Director General of the Mexican Institute of Social Security, which will charge US citizens working for US companies in Mexico to pay social security taxes to both countries. The agreement will also remove the double taxation requirement for Mexican citizens working for Mexican companies in the United States. “This agreement removes a serious and unnecessary obstacle for U.S. and Mexican companies and their employees,” said Commissioner Barnhart. “It is equally important that it promotes justice and fairness for workers who share their careers between our two countries.” Workers who are exempt from U.S. or foreign social security contributions under an agreement must document their exemption by obtaining a country 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. Agreements to coordinate social protection across national borders have been commonplace in Western Europe for decades.

This is followed by a list of the agreements reached by the United States and the effective date of each. Some of these agreements were then revised; The date indicated is the date on which the original agreement came into force. The agreement with Italy is a departure from other US agreements because it does not regulate the people cashed in. As in other agreements, the basic criterion of coverage is the territorial rule. However, the coverage of foreign workers is mainly based on the nationality of the worker. If an employed or self-employed U.S. citizen in Italy would be covered by U.S. Social Security without the agreement, he will remain covered by the U.S. program and exempt from Italian coverage and contributions. As a general rule, individuals should only take action on totalization benefits under an agreement when they are willing to apply for a pension, survival or disability. A person wishing to introduce a entitlement to benefits as part of a totalization agreement can do so with any social security agency in the United States or abroad. In the United States, after the signing of the agreement, the President will submit the agreement to Congress, where it will have to be reviewed for 60 days of session.

If Congress does nothing during this period, the agreement can move forward. The United States has agreements with several nations, the so-called totalization conventions, in order to avoid double taxation of income in relation to social contributions. These agreements must be taken into account in determining whether a foreigner is subject to the United States.