Identification Number:
RS 02001 TN 46
Intended Audience:See Transmittal Sheet
Originating Office:ORDP ODEPPIN
Title:International Agreements
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part RS – Retirement and Survivors Insurance
Chapter 020 – Coverage Under International Agreements
Subchapter 01 – International Agreements
Transmittal No. 46, 05/10/2021

Audience

PSC: CA, CS, ICDS, IES, ISRA, RECONR, SCPS, TSA, TST;
OCO-OEIO: CR, CTE, FCR, RECONR;
OCO-ODO: CR, CST, CTE, CTE TE;
FO/TSC: CS, CS TII, CSR, CTE, DRT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

ODEPPIN

Effective Date

Upon Receipt

Background

The Office of International Programs (OIP), which was responsible for negotiating and implementing bilateral Social Security agreements, has been disbanded and merged into various different areas of SSA.

As a result, the Totalization agreement negotiation and implementation workloads have been merged with the previous Office of Data Exchange and Policy Publications to form the new Office of Data Exchange, Policy Publications, and International Negotiations (ODEPPIN).

Additionally, the Office of Earnings and International Operations (OEIO) within the Office of Central Operations (OCO) assumed OIP's function of issuing certificates of U.S. Social Security coverage for workers posted abroad under the terms of the agreements.

Accordingly, we are revising existing POMS sections to account for new component names, addresses, and workload processes. We also updated the instructions to meet the Agency's plain language requirements.

Summary of Changes

RS 02001.150 Effective Date of the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

We revised the subsection title to include information in Heading B.

Subsection A - We revised the heading and provided the effective date of coverage for the supplementary agreement.

Subsection B - We revised the heading, provided the effective date of coverage for the supplementary agreement and updated the information on the effect on coverage.

 

RS 02001.155 Scope of the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

Subsection A - We revised the heading and the information for the policy for the United States.

Subsection B - We revised the heading.

 

RS 02001.160 General Coverage Rule for Employment Under the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

Subsection A - We revised the heading.

 

RS 02001.165 Detached Worker Rule Under the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

Subsection A - We revised the heading.

Subsection B - We revised the heading and updated the information for the detached worker rule.

 

RS 02001.170 Rule for Government Employees Under the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

Subsection A - We revised the heading.

Subsection B - We revised the heading and added subheadings 1 and 2 to separate the policy from a definition.

 

RS 02001.175 Coverage Rule for Self-Employment Under the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

Subsection A - We revised the heading and provided a clarifying sentence on residency determinations.

Subsection B - We revised the heading and provided updated information on filing obligations.

 

RS 02001.180 Special Exceptions to the Coverage Rules Under the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

Subsection A - We revised the heading and provided updated information on the intent of the special exception provision.

Subsection B - We revised the heading.

Subsection C - We added this heading and information from RS 02001.185 on how to request special exceptions.

 

RS 02001.185 How a Special Exception is Processed Under the U.S. - Swiss Agreement

We are archiving this section since we moved the information to RS 02001.180 for streamlining purposes.

 

RS 02001.190 Certificates of Coverage Under the U.S. - Swiss Agreement

In addition to the specific changes described in the Background, we updated this section to include plain language, editorial, and minor format changes.

Subsection A - We revised the heading.

Subsection B - We corrected the address for the Swiss social security office.

Subsection C - We revised the sub headings, provided information for when an employee requests the certificate and corrected the address for the Swiss social security office.

Subsection E - We added this heading and information on processing requests for certificates of coverage.

RS 02001.195 How a Certificate of Coverage is Issued Under the U.S. - Swiss Agreement

We are archiving this section since we moved the information to RS 02001.190 for streamlining purposes.

Conversion Table
Old POMS ReferenceNew POMS Reference
RS 02001.185Archive
RS 02001.195Archive

RS 02001.150 Effective Date of the U.S.-Swiss Agreement and Effect on Coverage

A. Effective date

The agreement with Switzerland became effective on August 1, 2014. This supplementary agreement replaces the November 1, 1980 agreement and a later amendment effective October 1, 1989.

B. Effect on coverage

If a worker's employment or self-employment is subject to both U.S. and Swiss social security coverage and taxation laws, the agreement provides that beginning August 1, 2014, only one country's social security coverage and taxation laws cover the worker's employment or self-employment. If a worker's employment or self-employment was subject to both U.S. and Swiss social security coverage and taxation laws prior to that date, effective November 1, 1980, the original agreement provides that the worker's employment or self-employment is subject to only one country's laws. If a worker's employment or self-employment was subject to both countries' social security coverage and taxation laws before November 1, 1980, that earlier employment or self-employment remains subject to those laws in both countries.

RS 02001.155 Scope of the U.S.-Swiss Agreement

A. United States

For the United States, the agreement applies to the Retirement, Survivors, and Disability ( RSDI) program and the corresponding tax laws (Federal Insurance Contributions Act (FICA) taxes for employment and Self-Employment Contributions Act (SECA) taxes for self-employment, including the Medicare portion). The agreement does not apply to Medicare benefits laws. If an employee is exempt from U.S. Social Security coverage under this agreement, neither the employee nor the employer share of the FICA tax is due as long as the exemption is effective. A self-employed person is exempt from paying SECA taxes (equivalent to the employee and employer shares of the FICA tax) for any period the exemption is effective.

B. Switzerland

For Switzerland, the agreement applies to social security taxes that finance old-age, survivors and disability benefits. Consequently, if an individual is exempt from Swiss social security coverage as a result of the agreement, no contributions are due under those programs.

RS 02001.160 General Coverage Rule for Employment under the U.S.- Swiss Agreement

A. Coverage rule and exceptions

1. General territoriality rule

Under the agreement, employment is ordinarily subject to the coverage laws of only the country where the employee performs the work. A person working in employment who otherwise would have dual coverage under the laws of both countries will remain covered only under the laws of the country where he or she performs the work.

2. Exceptions

The agreement provides several exceptions to the territoriality rule to ensure that a worker's coverage is under the system of the country to which he or she has the greater attachment. The references cited below list these exceptions.

B. Reference

RS 02001.165 - RS 02001.180 Exceptions to General Coverage Rule for Employment,

RS 02001.165 Detached Worker Rule under the U.S.- Swiss Agreement

A. Definition of a detached worker

A detached worker is an employee sent by his or her employer in one country to work temporarily in the other country for the same employer or an affiliate of that employer.

B. Detached worker rule

Under the agreement, a detached worker remains subject only to the social security laws of the country from which the employer transferred the worker. However, the worker must meet both of the following conditions:

  • The employer/worker expects the period of employment in the host country to last five years or less. The 5-year period begins with the date the employment in the host country begins or November 1, 1980 (the effective date of the original agreement), whichever is later;

  • The employment relationship existed before the employer transferred the worker from the home country.

The detached worker rule may apply even if the employer does not send the employee directly from one country to the other, but first assigns him or her to work in a third country.

C. References

  • RS 01901.070 Agreement under Section 3121(l) of the Internal Revenue Code

  • RS 02001.190 Certificates of Coverage under the U.S. - Swiss Agreement

 

RS 02001.170 Rule for Government Employees under the U.S.- Swiss Agreement

A. Vienna Conventions

The Vienna Conventions provide that, in general, nationals of a country who work abroad in the diplomatic or consular services of their country are exempt from social security coverage and contributions under the host country's laws, unless the host country specifically waives that exemption.

The Conventions, to which both the United States and Switzerland are parties, apply to:

  • members of the staff of a diplomatic or consular mission, including the diplomatic, consular, administrative and technical staffs;

  • dependents of members of those staffs;

  • the domestic service staffs of the missions; and,

  • the private servant employees of members of such missions (under certain conditions).

B. Agreement provisions

1. General

The agreement does not affect the coverage of U.S. or Swiss Government employees to whom the Vienna Conventions apply. They remain exempt from coverage in the host country.

The agreement establishes the following rules for government employees not covered by the Vienna Conventions:

  • U.S. nationals whom the U.S. Government or a U.S. Government instrumentality employs in Switzerland are subject to U.S. Social Security and/or Federal Pension Program taxes and coverage laws only.

  • Swiss nationals whom the Swiss Government or a Swiss Government instrumentality employs in the United States are subject to Swiss social security taxation and coverage laws only.

2. Definition

U.S. Government employee

For purposes of applying this provision of the agreement, the phrase "U.S. Government employee" means employees of the Federal Government or any of its instrumentalities.

C. Reference

RS 01802.050 Coverage Status - Employees of Foreign Governments and International Organizations,

RS 02001.175 Coverage Rule for Self-Employment under the U.S.- Swiss Agreement

A. Resident rule

A person whose earnings from self-employment would otherwise be subject to compulsory coverage in both the United States and Switzerland is subject only to the laws of the country of which he or she is a resident. If any question on residence arises, the appropriate agency of the country in which the person claims residency will make residency determinations.

Since this rule applies only to U.S. or Swiss residents, it would not affect a dually covered worker who resides in a third country (e.g., a self-employed U.S. citizen who works in Switzerland but resides in France). For this reason, the special exception provision of the agreement will eliminate dual coverage for such a worker (see RS 02001.180).

B. Self-employment vs employment

If a person who would otherwise have coverage under the laws of both countries engages in work activity, and one country considers that same work activity to be employment, and the other country considers it to be self-employment, the agreement assigns coverage as follows:

  • If the worker is a resident of the country that considers the work to be self-employment, then coverage is subject to the laws of the country of residence.

  • In any other case, coverage is subject to only the laws of the other country.

C. Filing obligation

A self-employed U.S. citizen who is subject only to Swiss laws under the agreement and is exempt from paying U.S. Self-Employment Contributions Act (SECA) tax must still file a U.S. tax return every year.

To show that self-employment earnings are exempt from SECA tax, the individual must do the following:

  • indicate on Schedule SE that the earnings are exempt under the agreement;

  • request a certificate of coverage from the Swiss authorities; and,

  • attach to the U.S. tax return every year (see RS 02001.190) as proof of the exemption a photocopy of the certificate of coverage Switzerland issues.

D. Reference

  • RS 02001.180 Special Exceptions to the Coverage Rules under the U.S. - Swiss Agreement

  • RS 02001.190 Certificates of Coverage under the U.S. - Swiss Agreement

RS 02001.180 Special Exceptions to the Coverage Rules under the U.S. - Swiss Agreement

A. Intent of special exception provision

The rules of the agreement for eliminating dual coverage described in RS 02001.160 through RS 02001.175 cover the majority of situations where the United States and Switzerland would both cover and tax a worker in the absence of an agreement. However, sometimes applying the normal agreement rules can have undesirable or inequitable results. For this reason, the agreement includes a provision that permits the authorities in both countries to grant exceptions to the normal coverage rules of the agreement.

The intent of the exception provision is not to provide workers or employers with the freedom to elect coverage in conflict with normal agreement rules. The purpose of the special exception provision is to allow a worker to continue coverage in the country where he or she normally works and has coverage, in order to ensure that he or she will meet eligibility requirements for retirement or disability benefits.

B. Consensus requirement for special exceptions

An employee and his or her employer or a self-employed person may request a special exception to the normal coverage rules of the agreement. Both countries must agree to the special exception and agree on the country of coverage, since the worker must remain subject to the coverage laws of one, but not both, countries. If either country does not agree with a proposed exception, the applicable coverage rule of the agreement determines the worker's coverage.

C. How to request special exceptions

An employee and his or her employer or a self-employed person who wish(es) to apply for a special exception may write to the address below in the country where the worker wishes to remain covered. The letter should:

  • give all the information necessary to issue a certificate of coverage under the U.S. - Swiss agreement; and

  • explain the reason for the special exception request.

Persons wishing to request an exception granting U.S. coverage should write to the following address:

Social Security Administration
Office of Earnings and International Operations (OEIO)
P.O. Box 17741
Baltimore, MD 21235-7741
USA

Persons wishing to request an exception granting Swiss coverage should write to the following address:

Federal Department of Home Affairs FDHA
Federal Social Insurance Office FSIO
International Affairs Division
Effingerstrasse 20
CH-3003 Berne
SWITZERLAND

Upon receipt of a request for a special exception, the agency that receives the request will consider it in collaboration with the other country's agency. If both agencies approve the request for a special exception, the agency that receives the request will issue a certificate of coverage. The certificate of coverage will serve as proof of exemption from social security coverage and taxes in the other country.

RS 02001.190 Certificates of Coverage under the U.S.-Swiss Agreement

A. Purpose of certificate of coverage

The U.S.-Swiss agreement requires each country to issue certificate of coverage forms for workers who, without the agreement, would have to pay social security taxes to both countries on the same earnings. The certificate serves as proof that the worker named on the certificate is:

  • subject to the social security taxation and coverage laws of the country issuing the certificate; and

  • exempt from social security coverage and contributions on the same earnings in the other country.

Employers or employees should request certificates of coverage in cases of employment and self-employed persons should request certificates of coverage in cases of self-employment.

B. Issuing agency

1. United States coverage

The Social Security Administration (SSA) issues the certificates of U.S. coverage. Our contact information is below:

Social Security Administration
Office of Earnings and International Operations (OEIO)
P.O. Box 17741
Baltimore, MD 21235-7741

2. Swiss coverage

The compensation fund in Switzerland that collects the Swiss social security taxes issues the certificates of Swiss coverage. Their contact information is below:

Federal Department of Home Affairs FDHA
Federal Social Insurance Office FSIO
International Affairs Division
Efferingerstrasse 20
CH-3003 Berne
SWITZERLAND

C. Requesting a certificate of coverage

1. U.S. certificate of coverage

Advise inquirers that to obtain a certificate of coverage from the United States, the employer, employee or self-employed person should contact SSA at:

Social Security Administration
Office of Earnings and International Operations (OEIO)
P.O. Box 17741
Baltimore, MD 21235-7741
Fax: (410) 966-1861
Request online: https://opts.ssa.gov

NOTE: This fax number is only for requesting U.S. certificates of coverage or letters stating that workers named in the letters are exempt from foreign social security coverage and taxation.

2. Swiss certificate of coverage

Advise inquirers that to obtain a certificate of coverage from Switzerland, they should write to:

Federal Department of Home Affairs FDHA
Federal Social Insurance Office FSIO
International Affairs Division
Efferingerstrasse 20
CH-3003 Berne
SWITZERLAND

D. Required information when making a request

Advise inquirers that when writing to obtain a certificate of coverage, they should provide the following information:

  • full name of worker;

  • social security number (U.S. number for U.S. certificate and Swiss number for Swiss certificate);

  • country of citizenship;

  • date and place of birth;

  • country of permanent residence;

  • name and address of employer in both countries (if self-employed, address of trade or business in both countries);

  • date and place of hire by sending company, if employed; and

  • beginning date and ending date (if known) of employment or self-employment in the other country.

NOTE: If the worker will be an employee of a Swiss affiliate of an American employer, the request must indicate whether the American employer has entered into an agreement with the Internal Revenue Service under Section 3121(l) of the Internal Revenue Code and, if so, the effective date of such an agreement.

E. Processing requests for certificates of coverage

OEIO or the Swiss authority takes the following steps to issue a certificate of coverage:

1. The employer or employee (in the case of employment) or the self-employed person (in the case of self-employment) writes to the appropriate authority requesting a certificate.

Note: For requests for U.S. certificates of coverage, the employer's or worker's representative (attorney, accounting firm, employer services firm, etc.) may request the certificate on the employer's or worker's behalf. If an employee requests the certificate, OEIO will need to contact the employer to confirm the accuracy of the information provided.

2. The United States or Switzerland issues the certificate, if appropriate.

3. The issuing agency sends the original and one copy to the requester.

4. The employer or worker presents the certificate to the tax authorities in the other country upon request. The tax authority in the other country may ask the employer or the worker for a copy of the certificate.

5. If the worker is a self-employed U.S. citizen or national who is subject only to Swiss laws under the agreement, the self-employed worker must attach a photocopy of the Swiss certificate of coverage to the Schedule SE filed with the U.S. income tax return each year.


RS 02001 TN 46 - International Agreements - 5/10/2021