REVENUE RULE 92-9

1992-1 C.B. 344, 1992-6 I.R.B. 9.

Internal Revenue Service
Revenue Ruling

SOCIAL SECURITY AGREEMENTS (TOTALIZATION AGREEMENTS); LIST OF COUNTRIES

Published: February 10, 1992

Section 3101  Rate of Tax, 26 CFR 31.3101-1: Measure of employee tax.

(See Also Sections 1401, 3111; 1.1401-1, 31.3111-1.)

Social security agreements (totalization agreements); list of countries. A list of countries in which the U.S. has entered into social security agreements (totalization agreements) is set forth. [Full text in this issue.]

Sections 3101(c) and 3111(c) of the Internal Revenue Code grant exemptions from taxes imposed by the Federal Insurance Contributions Act (FICA) if an individual's earnings are subject to taxes or contributions for similar purposes under the social security system of a foreign country that has an international social security agreement (referred to as a totalization agreement) with the United States. Section 1401(d) of the Code grants a similar exemption from the taxes imposed under the Self-Employment Contributions Act (SECA). Employees and employers exempted form FICA taxes and self-employed persons exempted from SECA taxes under the provisions of such an agreement are exempted form both the portion of the tax related to retirement, survivors, and disability insurance and the portion of the tax related to Medicare.

The United States has totalization agreements in effect with the countries listed below.

Country Date Source [FN1]         Entered Into      Force

Italy                             11-1-78 [FN2]    29 U.S.T. 4263, T.I.A.S. No. 9058

Federal Republic                  12-1-79 [FN4]    30 U.S.T. 6099, T.I.A.S. No. 9542
of Germany [FN3]

Switzerland                       11-1-80 [FN5]    32 U.S.T. 2165, T.I.A.S. No. 9830

Norway                             7-1-84           T.I.A.S. No. 10818

Belgium                            7-1-84           H.R. Doc. No. 98-77, 98th Cong., 1st Sess. (1983)

Canada                             8-1-84           T.I.A.S. No. 10863

United Kingdom                     1-1-85 [FN6]    H.R. Doc. No. 98-220, 98th Cong., 2d Sess. (1984)

Sweden                             1-1-87           H.R. Doc. 99-132, 99th Cong., 1st Sess. (1985)

Spain                              4-1-88           H.R. Doc. No. 100-66, 100th Cong. 1st Sess. (1987)

France                             7-1-88           H.R. Doc. No. 100-142, 100th Cong. 1st Sess. (1987)

Portugal                           8-1-89           H.R. Doc. No. 100-206, 100th Cong. 2d Sess. (1988)

Netherlands                       11-1-90           H.R. Doc. No. 100-182 100th Cong. 2d Sess. (1988)

Austria                           11-1-91           H.R. Doc. No. 102-54, 102d Cong. 1st Sess. (1991)

FN1. Best source available
FN2. Supplementary agreement entered into force 1-1-86. H.R. Doc. 99-36, 99th Cong. 1st Sess.
FN3. As of 10-3-90, includes territory of former German Democratic Republic (East Germany)
FN4. Supplementary agreement entered into force 3-1-88. H.R. Doc. 100-89, 100th Cong, 1st Sess.
FN5. Supplementary agreement entered into force 10-1-89. H.R. Doc. 101-27, 101st Cong. 1st Sess.
FN6. For taxation purposes (for benefit purposes, entered into force on 1-1-88).

Totalization agreements eliminate dual social security coverage, the situation that occurs when a person from one country works in another country works in another country and is required to pay social security taxes to both countries on the same earnings. Each agreement includes rules intended to assign a worker's coverage to the country where the worker has the greater economic attachment.

The rules that apply to employed persons generally eliminate dual coverage under the laws of the United States and the other country by maintaining the employee's coverage under the system of the country where the work is performed and exempting the employee from coverage and taxation in the other country.

Special rules apply, however, to employees who are transferred by their employers in one country to work in the other country for a temporary period. With the exception of the agreement with Italy, each totalization agreement provides that such employees will continue to be covered under the system of the country from which they are sent and are exempt from coverage and taxation in the host country.

The agreements also contains rules applicable to persons whose earnings from self-employment would be subject to coverage under the laws of both countries. They generally provide that self-employed workers are covered in the country where they reside.

Under the agreement with Italy, coverage of expatriate employees and self- employed workers is determined based on the worker's nationality.

Information regarding the totalization agreements listed above, including texts of those agreements may be requested by writing to the Social Security Administration, Office of International Policy, P.O. Box 17741, Baltimore, MD 21235; or by calling (301) 965-3545 (not a toll-free number).

DRAFTING INFORMATION

The principal author of this revenue ruling is Philip M. Corn of the Office of the Assistant Chief Counsel (Employee Benefits and Exempt Organizations). For further information regarding this revenue ruling, contact Mr. Corn on (202) 566-4748 (not a toll-free call).

1992-1 C.B. 344, 1992-6 I.R.B. 9.