On Oct. 1, 2018, the U.S. and Brazil signed a Social Security Agreement that allows companies to avoid double taxation on Social Security for people who have worked temporarily in one of the countries. It also allows the time spent on the other country’s system to count towards the time needed to acquire the right to benefits in their home country.

The employers can request a Certificate of Coverage for a period of up to five years for assignments overseas . This certificate will ensure employees will be covered under the home country Social Security system and be exempted from host country’s contributions.

This period can be extended for an additional six months. Additionally, there are also some special circumstances where different criteria are used in the evaluation.

Brazilian workers living in the U.S. and Americans living in Brazil now will be able to add periods of contribution to the local pension of these countries in achieving the minimum period required to obtain retirement benefits by the retirement age of the home country, as well as to qualify for certain disability and survivor benefits.

Although each country is responsible for the payment of the benefits in its own currency, according to the period of contribution made by the worker/employee, the agreement allows it to consider the period that employees contributed to the other country’s plan.

Our Latin America international advisors focus on Brazil and Latin America issues. We’re here to assist not only on Social Security matters, but also investment and ownership, entity formation and registration, due diligence, compensation and tax planning.