India and Czech Republic Sign Social Security Agreement
India and Czech Republic
India has recently signed a social security agreement (‘SSA’) with the Czech Republic. The SSA provides for the following benefits, on a reciprocal basis, to Indian nationals working in the Czech Republic:
• Indian nationals working in the Czech Republic, on a short-term contract up to five years, will be exempt from making social security contributions under the laws of the Czech Republic provided they continue to make social security contributions in India.
• The above benefits shall be available even when an Indian company sends its employees to the Czech Republic from a third country.
• Indian nationals shall be entitled to the ‘export’ of social security benefits if they relocate to India or a third country after the completion of their assignment in the Czech Republic.
• The above benefit of exportability would also be available to self-employed Indian nationals in the Czech Republic.
• The period of contribution made in one state will be added to the period of contribution in the second state for determining the eligibility for social security benefits in order to avoid a loss of contributions (totalization).
The SSA will come into force from the date to be notified separately.
KPMG Note
The signing of the SSA is a welcome step as it should result in cost savings for Indian / Czech Republic employers seconding their employees to the Czech Republic or India, respectively. The actual provisions of the SSA will have to be examined in detail to establish the other benefits, compliance requirements, and other related rules as laid down by the SSA.
Source: KPMG
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