TN 16 (11-96)

RS 02001.475 Self-Employment Rule - U.S. Spanish Agreement

The agreement also includes a rule that eliminates dual coverage of self-employment income by assigning coverage to the country in which the worker is a resident. Under this rule, a self-employed U.S. resident whose earnings would otherwise be compulsorily covered under both U.S. and Spanish law is covered only by the U.S. Similarly, a dually covered Spanish resident is covered only by Spain. (See GN 01702.230 concerning determinations of residence.)

In accordance with this rule, a self-employed U.S. citizen who is a resident of Spain is covered only under Spanish law. Although the person is exempt from paying U.S. SECA tax in this situation, he or she is still required to file a U.S. income tax return. In preparing the Schedule SE, the individual should indicate that his or her earnings are exempt from SECA tax under the agreement and attach a copy of the certificate of coverage issued by Spain (see RS 02001.485) as proof of the exemption.


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http://policy.ssa.gov/poms.nsf/lnx/0302001475
RS 02001.475 - Self-Employment Rule - U.S. Spanish Agreement - 04/14/2004
Batch run: 01/27/2009
Rev:04/14/2004