As of 8 March, 218, the Brazilian Chamber of Deputies has approved the Brazil-United States Social Security Agreement (2015). There are similar Social Security Totalization Agreements made across the globe, with the United States in SSTA agreements with 26 other countries. These agreements are common for workers that will not be contributing enough to the social security system in the host country long enough to accrue a retirement benefit, yet is charged social security taxes in both the home and the host country. Until an agreement is made between countries, there is no credit mechanism to alleviate a double tax such as this.
The Brazil-United States Social Security Agreement states that a worker will pay social security taxes in the country where he provides services. A “detached worker” exception may be made if necessary, which states that if a worker is assigned by his employer to work in the host country for no more than five years, he will be exempt from the host country tax and continue to be subject to the home country tax. The employer of such a worker will need to apply for a Certificate of Coverage from the home country social security authorities in order to validate this exemption.
The US-Brazil agreement covers old age, survivor’s, and disability insurance systems of both countries do not apply to the Brazil Fundo de Garantia do Tempo e Serviço (FGTS), which is the Severance Indemnity Fund for employees.