Under the agreement, a detached worker remains subject only to the social security
laws of the country from which the employer transferred him or her. However, the worker
must meet all the following conditions:
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•
The employer/worker expects the period of work in the host country to last no more
than 5 years. The 5-year period begins with the date the work in the host country
begins or March 1, 2019, (the effective date of the agreement), whichever is later;
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•
The employment relationship existed before the employer transferred the worker from
the home country; and
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•
If an American employer sends an employee to the company's affiliate in Iceland, the
American employer must enter into an agreement with the Internal Revenue Service (IRS)
under section 3121(l) of the IRS Code. The 3121(l) agreement provides, among other
things, social security coverage for U.S. citizens and residents employed by the affiliate.
In such cases, the employer must still obtain a certificate of coverage to establish
the exemption from Icelandic social security taxes.