If a person is eligible for a U.S. Social Security benefit based on combined U.S. and foreign coverage under a totalization agreement, the amount of U.S. benefit payable is only proportional to the periods of coverage acquired in the United States. Similarly, the partner country pays a partial or proportional benefit if the combined coverage gives rise to a claim. Thus, it is possible for a person to receive a comprehensive benefit under an agreement from one or both countries if they meet all applicable eligibility requirements. In the United States, pro-rated benefit provisions are uniform across all aggregation agreements, as provided by law in 42 U.S.C. § 433 and 20 C.F.R. § 404.1918. Determining a prorated U.S. benefit amount under a tablation agreement is a three-step process. Additional special rules generally apply to seafarers, flight crews, diplomats, civil servants and persons whose employers have transferred them not directly from one tabisation country to another, but from one aggregation country to a third country before a subsequent transfer to the other aggregation country. The partner countries of aggregation may also agree on specific exemptions for individual workers or entire categories of workers.
However, for the United States to accept a special exception, two basic principles must be respected: the person must be insured in a single country and the person must maintain coverage in the country with which he or she is most likely to have the greatest economic ties. Examples of common coverage situations can be found in Appendix A. Most U.S. tab totalization partners have more social security agreements in place than the U.S. with its 28 as of November 2018. In comparison, Canada, France, Germany and the UK had 57, 80, 50 and 53 agreements in 2014 – which conclude tabulating agreements as treaties, circumventing some of the legal restrictions of the US process – (Leeuwenhaag 2014). As mentioned earlier, the abolition of double taxation of income in more countries could encourage an increase in foreign direct investment in the United States. In addition, thousands of beneficiaries who are currently not eligible for a pension from one or both countries could benefit significantly from an expanded aggregation programme. To prove to the tax authorities of a host country that an employee is exempt from paying the social taxes of that country, he (or his employer) must keep a certificate of coverage and present it if necessary. The certificate is a document issued by the country whose laws continue to apply to that person in accordance with the rules of the agreement.
The agreements specify the bodies responsible for issuing these certificates in each country. In 2019, through diplomatic communications, the United States and the French Republic made it clear that the French taxes Contribution Sociale Generalisee (CSG) and Contribution au Remboursement de la Dette Sociate (CRDS) are not social taxes covered by the Social Security Agreement between the two countries. Accordingly, the IRS will not challenge the foreign tax credits for CSG and CRDS payments on the grounds that the Social Security Convention applies to these taxes. .