RS 02001.570 Coverage Rule for Self-Employment - U.S. Portuguese Agreement
A. POLICY PRINCIPLE — GENERAL RULE
A person whose earnings from self-employment would otherwise be subject to compulsory coverage under the laws of both the United States and Portugal will be subject only to the laws of the country of which he or she is a resident.
NOTE: A self-employed U.S. citizen who is subject to Portuguese law under the agreement is exempt from paying SECA tax. However, he or she is still required to file a tax return every year. When 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 Portugal (see RS 02001.581) as proof of exemption.
B. POLICY PRINCIPLE — SPECIAL SITUATION
In certain cases, a person may be engaged in work activity that is considered self-employment under the laws of one country and employment under the laws of the other and is covered by both countries. To eliminate this dual coverage, the agreement provides that
if the person is a resident of the country which considers him to be self-employed, he will be covered under the laws of that country;
if the person is a resident of the country which considers him to be an employee, coverage will be determined following the rules for employees discussed in RS 02001.560 - RS 02001.565.