TN 16 (11-96)

RS 02001.410 Scope of the U.S. Swedish Agreement

With respect to U.S. Social Security taxes, the agreement only applies to taxes under the RSDHI program (i.e., FICA for employees and employers and SECA for self-employed persons, including that portion related to HI). It does not affect any taxes related to other programs such as Workers' Compensation or Unemployment Insurance. Thus, if an individual is exempt from U.S. Social Security coverage under this agreement, neither the employee nor employer share of the FICA tax, or SECA tax in the case of a self-employed person, is required to be paid.

For Sweden, the agreement applies to social security taxes which finance old-age, survivors and disability benefits under Sweden's “basic” and “supplementary” pension programs (see GN 01717.020 for a description of these programs.) The agreement does not affect tax liability under other Swedish programs such as health insurance, work accident and occupational illness insurance or the family allowance benefit program. Consequently, if a worker is exempt from Swedish social security coverage as a result of the agreement, no contributions are due under the Swedish old-age, survivors and disability benefit programs, but the tax exemption does not extend to the normal contributions payable under other Swedish programs.