The U.S. Social Security Administration recently announced that the United States and Slovenia signed a Social Security Totalization Agreement (“the agreement”) to protect U.S. and Slovenian employers and workers from dual social security tax liability.1 The agreement, signed by representatives of the two countries on January 17, 2017, has not yet been made public.
Once it enters into force, the agreement is expected to help facilitate the cross-border movement of workers between Slovenia and the United States.
The agreement will eliminate dual social security contributions, which occur when a worker from one country works in another country. It will also close the gaps in benefit protections for workers who divide their careers between the United States and Slovenia. This will help assure continued contributions into their respective social security systems and benefits entitlement, as well as bring peace of mind to workers who may have concerns about their contributions and future benefits when they are assigned to work in the United States or Slovenia.
The U.S. Social Security Administration estimates that in its first seven years in effect, the agreement will save U.S. and Slovenian workers and their employers nearly $40 million in dual social security and health insurance taxes.
The agreement will undergo review by the legislatures in the United States and Slovenia. Once approved, Instruments of approval will be exchanged. The agreement will take effect after completion of the exchange.
The current rules and practices remain in effect until the new agreement enters into force.
1 For a Fact Sheet on the signing announcement and FAQs about the agreement, please see the State Department webpage.
Also, for further news on the signing of the agreement, see the SSA’s “International Update, February 2017”.
For the announcement (in Slovenian) of the signing of the totalization agreement, see the Slovenia’s embassy in the United States website.
The above information is not intended to be "written advice concerning one or more Federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.
The information contained in this newsletter was submitted by the KPMG International member firm in the United States.
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