23 Nov Us Costa Rica Totalization Agreement
The US Costa Rica Totalization Agreement: An Overview
The US Costa Rica totalization agreement is a bilateral agreement between the United States and Costa Rica that aims to eliminate double taxation of social security benefits. This agreement ensures that individuals who have worked in both countries receive the benefits to which they are entitled from either or both countries.
The agreement between the US and Costa Rica was signed on March 12, 2004, and went into effect on December 1, 2009. The agreement covers individuals who are citizens or residents of either country and have paid into the social security system of both countries.
Before the agreement was in place, individuals who had worked in both countries and were eligible for social security benefits were often subject to double taxation, which meant that they would pay social security taxes in both countries and receive reduced benefits in both countries. The US Costa Rica totalization agreement changed this, ensuring that individuals would only pay social security taxes in one country and receive the full benefits to which they were entitled.
Under the agreement, workers who have split their careers between the US and Costa Rica will be able to count their time in both countries towards their eligibility for social security benefits. In addition, the agreement ensures that workers who have contributed to both the US and Costa Rican social security systems are eligible for benefits, regardless of where they choose to retire.
The US Costa Rica totalization agreement is part of a larger effort by the United States to increase social security protection for US workers who have worked abroad. Similar agreements have been signed with 28 other countries, including Canada, Germany, and the United Kingdom.
In conclusion, the US Costa Rica totalization agreement is a significant step towards ensuring that individuals who have worked in both the US and Costa Rica receive the social security benefits to which they are entitled. This agreement eliminates double taxation of social security benefits and ensures that workers` contributions to both countries` social security systems are recognized. Its implementation is a significant achievement in the development of social security protection for US workers and a stepping stone towards future similar agreements.