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INDIA BUSINESS WORLD - October 1st October 15th 2008
INDIA, GERMANY INK SOCIAL SECURITY PACT
INDIAN nationals working in Germany for short duration have a reason to rejoice. India and Germany have inked a social security agreement (SSA) that exempts Indians from making contributions to Germany’s social security system, provided the employer back home continues to contribute to EPFO. German nationals working here will receive similar benefits on reciprocal basis.
The exemption for a period of four years, which can be extended to another 12 months, relives such workers from making payments to social security organisations in both countries, by categorising them as ‘detached workers’. The category includes professionals sent from India-based companies to their German subsidiaries and those being sent by German companies to India. German ambassador to India, Bernd Metzelburgs and secretary, ministry of overseas Indian affairs K Mohandas signed the agreement.
It was felt that companies were turning less competitive due to the high rate of social security tax they were paying. This totalisation agreement, it is felt, would make Indian companies more competitive as the exemption from double payments reduces burden of costs substantially, said G Gurucharan joint secretary in the ministry for overseas Indian affairs.
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