India, Portugal ink Social Security pact
India and Portugal inked a Social Security Agreement (SSA). About 75,000 Indians are living in Portugal, most of them are working as professionals and self-employed. The bilateral Social Security Agreement is significant requirement from the futuristic point of view to take advantage of the emerging employment opportunities and to further strengthen the trade and investment between the two countries.
Benefits that will come from this Social Security Agreement:
- For short term contract upto 5 year, no social security contribution would need to be paid under the Portuguese law by the detached workers provided they continue to make social security payment in India.
- The above benefits shall be available even when the Indian company sends its employees to Republic of Portugal from a third country.
- Indian workers shall be entitled to the export of the social security benefit if they relocate to India after the completion of their service in Republic of Portugal.
- The self-employed Indians in Republic of Portugal would also be entitled to export of social security benefit on their relocation to India.
- The period of contribution in one contracting state will be added to the period of contribution in the second contracting state for determining the eligibility for social security benefits.
What is Social Security contribution?
Social Security contribution is similar to India’s Employees Provident Fund (EPF). As per Indian Labor Law, it is mandatory for every employer and employee who falls under the ambit of Employees Provident Fund Act 1952 to make contribution towards the provident fund. Similarly, Portugal has a mandatory contribution fund known as Social Security. In the absence of this pact, the Indian workers in foreign nations paid social security tax in the countries of their stay although they contributed there part in India.
Countries with which India has signed SSA:
There are 17 nations:
Belgium, Germany (Social Insurance), Switzerland, France, Luxemburg, The Netherlands, Hungary, Denmark, The Czech Republic, Republic of Korea, Norway, Germany (Comprehensive SSA), Finland, Canada, Japan, Sweden and Austria.
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