Swiss Social Security Agreements

If the bilateral agreement between Switzerland and the relevant EU countries did not cover third-country nationals, the allocation and distribution of social security contributions could nevertheless be unavoidable, independently of this new agreement. The Swiss social security authorities will examine your complaint if it affects your rights under the Swiss system. U.S. Social Security authorities will review your complaint if it affects your rights under the U.S. system. Since each country makes its own decisions independently of the other, a decision of one country on a particular issue may not always coincide with the decision taken by the other country on the same issue. The transitional provisions for Brexit expiring on 31 December 2020, the Agreement on the Free Movement of Persons (FINOPA) and Ordinance 883/2004 and the Ord. 987/2009 on social security. (For previous FMOPA coverage, see GMS Flash Alert 2019-035, February 26, 2019.) A new agreement, which entered into force on 1 August 2014 between the United States and Switzerland, improves social security coverage for people who work or have worked in both countries. The agreement helps many people who would not otherwise be entitled to a monthly pension, disability or survivors` benefits under the social security system of one or both countries. The agreement also helps people who would otherwise have to pay social security taxes to both countries with the same income.

You may want to call the Social Security office before you go there to see if you need to provide more information. To date, Switzerland has concluded international social security agreements with 44 countries. The objectives of these agreements are: to ensure equal treatment of citizens of the Contracting States, to determine the applicable legislation and to pay social security benefits abroad. When a U.S. benefit becomes due based on the U.S. and Swiss Social Security Credit Statement, SSA determines an initial benefit based on your U.S. income, as if you had completed your entire career in the U.S. system. Next, we reduce the initial benefit to take into account the fact that Swiss loans helped make the benefit payable.

The amount of the rebate depends on the number of U.S. credits you have. The more loans there are in the United States, the smaller the reduction; and the less U.S. credit there is, the greater the reduction. On the other hand, if your employer sends you from one country to work for that employer or a subsidiary in the other country for five years or less, you only pay social security taxes in the country from which your employer sent you. And you don`t pay taxes in the other country. For example, if an employer sends an employee to work for that employer or a subsidiary in Switzerland for up to five years, the employer and employee will continue to pay only Social Security taxes in the United States. You do not have to pay social security taxes in Switzerland. The certificate of coverage you receive from one country indicates the effective date of your exemption from paying social security taxes in the other country. Typically, this is the beginning of your temporary assignment in the other country or the start of your self-employment there.

To avoid difficulties, your employer (or you, if you are self-employed) should apply for a certificate of coverage as soon as possible, preferably before you start working in the other country. It is important to note that Switzerland does not apply EU rules on the coordination of affiliation in the field of social security on the basis of basic Regulation (EC) No 883/2004 to third-country nationals in multi-state workers` institutions or to assignments between EU countries and Switzerland. The Social Security Agreement between Switzerland and Brazil (“Agreement”) entered into force on 1 October 2019. It coordinates the social security regulations of the two Contracting States in the areas of old age, survivors and disability and regulates the payment of State pension benefits abroad. If you work as an employee in the United States, you and your employer generally only pay U.S. Social Security taxes under the agreement. If you work as an employee in Switzerland, you usually only pay Swiss social security taxes and neither you nor your employer pay social security taxes in the United States. The governments of the United Kingdom and Switzerland have just signed a new bilateral social security agreement. It is expected to enter into force at the end of 2021. Since 1 January 2021, EU Regulations 883/2004 and 987/2009 have been repealed.

Instead, the bilateral social security agreement between Switzerland and Great Britain of 1968 will apply from 1 January 2021. According to the bilateral social security agreement between Switzerland and the United Kingdom, posted workers can remain in their original social security system for a period of 24 months, but this does not cover the case of multi-state employees. For multi-state scenarios, the workplace principle applies. Among the other implications of the UK`s vote to leave the EU in 2016, when working in Switzerland and the UK, the consequences in terms of coordination of social security systems must be taken into account. Until now, social security coordination has been between Switzerland and the United Kingdom. were governed by the Agreement on the Free Movement of Persons (AFMP), Annex II (Coordination of Systemic Systems) with the EU. (For more information on coverage, see the following issues of GMS Flash Alert: 2021-038 (January 25, 2021) and 2020-494 (14. December 2020).) FSIO offers detailed brochures on the main social security agreements. Impact on social security: Working arrangements would be implemented in two countries, indicating that the provisions would apply to the multi-state worker. As a multi-state worker performing 25% of the work tasks in the country of habitual residence, the social security laws of the country of habitual residence would apply, in this case Switzerland. If the UK employer is not present in Switzerland, the employee may agree to fulfil the employer`s obligations on his behalf with regard to the payment of contributions.

The UK employer would be required to notify such an agreement to the competent Swiss authorities. A certificate of coverage can be obtained while the working arrangements are in effect. In order to regulate social security relations comprehensively and systematically, the two countries have negotiated a new bilateral agreement, which was recently approved by the Swiss and British governments. This agreement is important to ensure the most effective coordination of social security legislation in both countries. If you are self-employed and normally have to pay social security taxes to the US and Swiss systems, you can set your exemption from any of the taxes under the agreement. The new bilateral social security agreement between Switzerland and the United Kingdom is good news. However, it is still recommended to look at the scenarios in which British nationals move between Switzerland and EU countries. In such cases, a distribution of social security contributions may still be necessary. For employees whose secondment from Switzerland to Brazil began before the entry into force of the agreement (1 October 2019) and who have voluntarily remained in the Swiss social security system during this period, a certificate of coverage (CoC) can now be requested retroactively from 1 October 2019. The application must be submitted as soon as possible via the online application tool (ALPS). As far as Turkey is concerned, the SSA CH-TR applies to the legislation on social security of employees (sickness, maternity, invalidity, old age, death, accidents at work and occupational diseases), the pension fund of civil servants and employees of the country, the social security of the self-employed and the pension funds of banks, chambers of commerce and industry, insurance companies and stock exchanges.

It is important to note that the transitional and final provisions of the agreement (Article 34) are not yet entirely clear. KPMG International`s member firm in Switzerland has been informed that the Swiss Social Security Administration (FSIO) recommends the following practice until the transition rules are officially fulfilled: To obtain a Swiss certificate, add the same information as listed for a US coverage certificate and provide your Swiss social security number instead of your US social security number. The employer in the United States must keep a copy of the Swiss certificate of coverage in the event of an IRS audit. Do not send a copy to the IRS. The IRS will explicitly ask for a copy if it needs one. For more information about Swiss social security programmes, please contact the compensation fund of the canton where you reside or one of their local branches. If you do not reside in Switzerland, write to: In general, the agreement is similar to other social security agreements concluded by Switzerland and complies with the international standards that generally apply to these agreements. The scope ratione materiae of the Convention covers the legislation of both States in the field of old-age, survivors` and invalidity insurance.

It deals in particular with (i) equal treatment of nationals of the two Contracting States, (ii) access to social security benefits of States Parties and (iii) payment of ordinary State pensions abroad. With regard to the latter point, under that agreement, which provides social protection for international successors by coordinating contribution periods and benefits, such transferees generally do not lose their right to social benefits in their country of origin when they travel to the other country to work, and the agreement facilitates their access to benefits resulting from contributions paid in the host country. .