Similarly, for Indian workers when they are transferred to Japan, employers should obtain a certificate of coverage in India and/or benefit from Japan`s social security benefits. In addition, this SSA promotes the principle of reciprocity with regard to the benefits of workers posted by their employers in the other country. This should help workers who are trying to decide whether to contract in Japan or India to make a positive decision in favour of the transfer, knowing that the social security contributions they pay in the country where they work on the allowance are in addition to the contribution period in their home country to determine the right to benefits. The Social Security Agreement (`SSA`) between India and Japan comes into force on 1 October 2016. As a result, it is time for employers who have affected workers between India and Japan to take steps to qualify for the corresponding benefits under the SSA. The main objective of the SSA is to help ensure that workers working from one country to another do not pay double the social security tax. This can help reduce the cost of international operations between Japan and India and Japan. 2 Article 28 SSA states that the agreement enters into force on the first day of the fourth month following the date of receipt of the last notification. On 20 July 2016, the two governments exchanged notes in accordance with Article 28 and notified the conclusion of the constitutional and legal procedures necessary for the agreement to enter into force. Companies that have incoming agents in India or outgoing agents in Japan may revise their filing guidelines to change the terms of the new SSA. Benefits paid by international transferees under their respective social security schemes can be paid on conditional terms. The Indo-Japanese SSA is the 17th SSA that comes into force – countries with which India already has effective ASS are shown in the Appendix A table. Japanese and Indian employers who send workers to the other country to work should consult with their qualified experts in taxation, social security or global mobility to find that these workers can now be covered by the social security of their country of origin during the allocation period and apply for an exemption from the host country.
For more information or support, please contact your local GMS or People Services professional or your next professional with KPMG International`s member company in India: Benefits obtained by international agents under one country`s social security legislation are “exportable” to the other country. Workers in one country who are seconded by their employers to the other country with short-term jobs may be exempt from social security contributions in the host country for up to five years. The service time provided by a worker in the host country is added, under certain conditions, for the purposes of eligibility under the social security scheme in his country of origin. The content of this article is intended to provide a general guide on the subject. Technical advice on your specific circumstances.