U.s.-German Social Security Agreement

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Workers, employers and the self-employed may, in certain circumstances, be required, in certain circumstances, to pay social security contributions for the same work, both in the United States and in Germany. As U.S. commercial and commercial interests have spread around the world, the list of major trading partners increasingly includes countries that do not have a system that meets all U.S. legal requirements. This may penalize U.S. companies, workers and potential social security beneficiaries abroad who could benefit from such agreements. You can also write to this address if you want to propose negotiating new agreements with certain countries. In developing its negotiating plans, the SSA attaches considerable importance to the interests of workers and employers who will be affected by potential agreements. The Data Protection Act requires us to inform you that we are entitled to collect this information until Section 233 of the Social Security Act. Although it is not mandatory for you to provide the information to the Social Security Administration (SSA), a coverage certificate can only be issued if an application has been received. The information is necessary to enable the SSA to determine whether, in accordance with an international agreement, the work should only be covered by the U.S. social security system. Without the certificate, work can be taxed in both the United States and foreign social security schemes.

In addition to improving the social security of working workers, international social security agreements help ensure continuity of benefit protection for people who have received social security credits under the U.S. system and another country. This document discusses the strengths of the agreement and how it can help you work and apply for benefits. The agreements also have a positive effect on the profitability and competitive position of companies operating abroad by reducing their business costs abroad. Companies with staff stationed abroad are encouraged to use these agreements to reduce their tax burden. The Federal Republic of Germany has signed reciprocal social security agreements with 20 countries. These agreements essentially regulate the acquisition of the pension and the payment of pensions in the countries concerned. For the calculation of your pension, the principle is that each Member State or contracting country pays only the pension of its own insurance period and according to its own legal provisions. 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. Workers who have shared their careers between the United States and a foreign country may not be entitled to pensions, survivor benefits or disability insurance (pensions) from one or both countries because they have not worked long or recently enough to meet minimum conditions.

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