Yes, yes. Well, without going into detail, yes, this agreement has a special rule for people who have worked temporarily in a third country. We asked our international social security expert, Bob Rothery, in San Diego to comment on the details of the agreement. Welcome, Bob. First of all, Bob, remember, what is a totalization agreement? Time is running out, but I would just like to go back to a point that was made at the beginning of our discussion. One of the main advantages of this totalization agreement between the United States and Brazil is the possibility of paying only one social security tax instead of two. Well, that`s true. There are certain transitional rules that people have to follow when a new agreement comes into force. But the first thing to understand is that the agreement is not retroactive. A person who has paid social security tax in both countries is not entitled to the tax tax refund for — before the agreement comes into effect. Tax contracts and totalization agreements have been saved JOHN SEERY: And this can cause problems in international operations. How does the totalization agreement prevent it? For the self-employed, the agreement provides for a tax in the country of residence.
It should not be forgotten that totalisation agreements are international treaties aimed at guaranteeing the rights of social security to policyholders and their nationals of the candidate countries. These agreements allow the date of contributions of workers to the social security schemes of the two countries for the acquisition of social benefits, such as the old age or disability pension, to be accounted for. B the increase in pension in the event of death, as well as the prevention of double taxation in the event of temporary reassignment. On June 30, 2015, Brazil and the United States signed a totalization agreement that was incorporated into Brazilian law by Decree 9.422 and entered into force on June 25, 2018. As of October 1, 2018, the agreement is in effect and applies in all regions of Brazil. For example, the U.S. social security system requires 40-quarters of contributions to qualify for social benefits. A worker with 20 coverage quarters in the United States and 20-quarters of coverage in Brazil would not have had the coverage period necessary to obtain social security benefits in the United States. Under the agreement, the 20 work credits granted by the worker in Brazil would help to reach the U.S. threshold needed to obtain partial maintenance benefits under the U.S.
system. The 20 U.S. work credits would also be taken into account in determining the worker`s right to partial benefits from Brazil. Recently, it was learned that the Comprehensive Social Security Agreement (SSTA) between the United States and Brazil will finally come into force on October 1, 2018. It is estimated that approximately 1.3 million Brazilians and 35,000 Americans will benefit from this agreement. Totalization agreements are international social security agreements. They ensure that periods of social security under a country`s social security system are taken into account when determining the right to social security benefits (for example). B pensions) in the other country. Often, these agreements allow international workers temporarily assigned to the other country to maintain social security contributions in their home countries for a limited period of time in order to avoid double taxation.