Do we have to pay social security in both countries?
Not if the assignment is certified. The agreement between the two countries assigns coverage to one system for a defined period, and the certificate obtained from the home authority is what evidences that assignment to the other. Without it the host payroll has nothing to rely on and will treat the salary as covered locally, so both systems bill the same wages. The certificate is the document that prevents that, and it is the employer who carries the consequences of not holding one, because the contribution obligation sits on the payer.
Can we apply for a certificate of coverage after the assignment starts?
It should be applied for before the assignment begins, and the reason is practical rather than formal. Coverage is assigned by the agreement, not by the date of the paperwork, but the host authority has no evidence of the assignment until the certificate exists. In the meantime the host payroll deducts, and deductions already taken have to be unwound with the authority that collected them rather than simply stopped. That is slower and more expensive than applying at the outset, and it leaves the employee's contribution record showing periods in the wrong system.
Does the tax treaty cover social security contributions as well?
No. Social security is governed by its own agreements, which sit separately from the tax treaty and are not settled by how the salary is taxed. An employee can be taxed in one country and covered for contributions in the other, and each question is answered from its own instrument. This catches employers who have worked out the withholding position on treaty grounds and assume the contribution position follows. It does not. The coverage question is answered by the social security agreement and evidenced by the certificate, and it has to be worked through on its own.
Will years worked abroad still count towards a pension?
That is the second thing the agreement does. As well as assigning coverage to one country, it allows contribution periods in each country to be aggregated when benefit entitlement is worked out, so an employee whose working life is split does not lose the periods spent under the other system. What matters is that the periods are actually credited to the right system at the time, which is why the certificate is worth having on file rather than reconstructing years later. Aggregation works from the record; it cannot invent periods that were never credited anywhere.
Which country's authority issues the certificate of coverage?
The home authority, meaning the one whose system keeps covering the employee during the assignment. The application goes to it, not to the country the employee is travelling to, and the host authority's role is to accept the certificate as evidence that its own system does not apply for that period. For an employer with staff moving in both directions, that means two different application routes and two sets of home-country paperwork, so it is worth deciding who owns the process before the first assignment rather than after a host payroll has started deducting.
How long does a certificate of coverage last?
For the defined period the agreement allows, which is what makes an assignment that runs on a live issue rather than a settled one. Coverage is assigned for a period, not indefinitely, so an extension has to be dealt with before the certified period ends. If it is not, the employee can drift into the host system without anyone in payroll noticing, and the first sign is usually a deduction appearing on a host payslip. Track the certified end date next to the assignment end date, because the two are frequently not the same.
Does India have a tax treaty with the United States?
Yes. India and the United States have a comprehensive agreement covering residency, business profits, dividends, interest, royalties and fees for technical services, along with relief for the same income taxed in both. Claiming it from the Indian side generally means a residency certificate and Form 10F, and the credit itself is claimed on Form 67. See DTAA relief — India and the United States.
What is the treaty saving clause, and why does it matter to Americans abroad?
It is the provision that lets each country keep taxing its own residents and citizens as though the treaty did not exist. Because the United States taxes on citizenship, the saving clause is what stops an American in Canada or India using the treaty to remove US tax on ordinary income. A short list of articles is carved out of it — certain pensions, social security, government service, students — and those exceptions are where a treaty position for a US citizen usually lives. See our treaty work.
