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 all of the following conditions:
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•
The employer/worker expects the period of employment in the host country to last 5
years or fewer. The 5-year period begins with the date the employment in the host
country begins or August 1, 1989 (the effective date of the agreement), whichever
is later;
and
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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 that employer's affiliate in Portugal,
there must be an agreement in effect between the American employer and the Internal
Revenue Service (IRS) under Section 3121(l) of the Internal Revenue Code with respect
to the affiliate. The 3121(l) agreement provides, among other things, for Social Security
coverage for U.S. citizens and residents that the affiliate employs. In such cases,
the employer must still obtain a certificate of coverage to establish the exemption
from Portugal social security taxes.
NOTE: The detached worker rule applies even if an employer does not directly send the employee
from one country to the other, but first assigns him or her to work in a third country.