- Dicembre 19, 2020
A list of countries with which the United States currently has totalization agreements and copies of these agreements can be accessed under U.S. international social security agreements. Brent Jackson and Scott Cash are at the Office of Data Exchange and International Agreements, Office of Data Exchange, Policy Publications and International Negotiations, Office of Retirement and Disability Policy, Social Security Administration. 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 approval status allowing the agreement with Italy to enter into force.12 Attempts have been made in recent years to advance legislative proposals to amend Section 233 to broaden the scope of totalization for the sake of American interests while maintaining the program`s traditional focus on actuarial balance and fiscal prudence. However, such legislative proposals have not been highly appreciated and, to date, totalisation partnerships continue to focus on Europe, with a few notable exceptions. Totalization agreements are popular with U.S. companies because they exempt employers from paying a dual social security tax.
According to a regular study of net tax savings by the Office of International Programs of the Social Security Administration (SSA), U.S. companies and their employees save about $1.5 billion a year in foreign social taxes based on these agreements. These tax savings help make U.S. operations more profitable around the world, while improving the competitiveness of U.S. trade. The totalization agreements also excuse foreign workers temporarily sent to the United States for payment of U.S. Social Security taxes. The result is annual savings of approximately $500 million for the foreign workers involved and their employers. These tax savings make the United States a more attractive destination for foreign capital, thereby encouraging foreign direct investment. Tax payers must write in red at the top of forms 1040-X “French CSG/CRDS rights” and submit them in accordance with the instructions of these forms with the attached forms 1116.
U.S. employers cannot claim refunds that have withheld a foreign tax credit for CSG/CRDS or who have paid it on behalf of their employees. 10 Although most agreements remove payment restrictions applicable to all residents of both countries, agreements with Austria, Belgium, Denmark, Germany, Sweden and Switzerland remove payment restrictions only for nationals of both countries or stateless persons and refugees residing in both countries. The overall average of reports (in this example an 8-year average) is called the relative position of merit, which corresponds to 2.2871073 for our hypothetical worker. This amount is then multiplied by the national average salary for each year over an entire career. This period begins from the year in which the worker has reached the age of 22 (in this case 1973) and ends in the year in which the worker has reached the age of 61 (2012). The result is called the theoretical yield balance sheet; That is the case with the United States.