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Firms & Expatriates
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| Social insurance abroad |
| Transfer Abroad / Inclusion in Social Security |
Applying the territorial principle, expatriates are as a matter of principle insured first of all under the social security scheme in the country where they are working. An exception is made for employees who are instructed by a domestic employer to go abroad on business for a period that is limited in advance. In any such case, salary payments continue to be made in the home country, and the domestic employer has to report them for tax. Provided these criteria are met, the employment rela-tionship is included in the German social security insurance, and the member of staff is allowed to remain in the German social security scheme.
If employees cannot retain their German social security because of these criteria, then the BDAE’s EXPAT® COMPACT – which has been specially developed for expatriates – offers an attractive alternative social security concept.
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| Non-Convention Countries |
| With the majority of nations, Germany does not have social security conventions. This includes a lot of countries where German employees are frequently sent, such as Argentina, Brazil, India, Malaysia, Mexico, Saudi Arabia, Singapore and South Africa amongst others. If employees are staying in these countries, then initially the statutory regulations on social security in the country where they are living and working apply. See top left. |
| EEA Guidelines |
| If an employee is transferred to a state belonging to the European Union or the European Economic Area, then Council Regulation (EEC) No. 1408/71 applies. This supra-governmental social security regulation regulates all areas of social security insurance. See top left. |
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| Convention Countries |
The Federal Republic of Germany has social security conventions with a number of countries. The aim of these conventions is to avoid double insurance, and to have periods which people spend abroad counted towards social security insurance in their home country on return. As a rule however, these intergovernmental conventions only relate to individual areas of social security, and they stipulate important basic requirements for transfers abroad.
The convention countries include Bosnia Herzegovina, Bulgaria, Canada, Chile, China, Croatia, the Czech Republic, Hungary, Israel, Japan, Korea, Macedonia, Morocco, Poland, Quebec, the Republic of Yugoslavia, Slovenia, Switzerland, Tunisia, Turkey, and the USA.
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| Consequences of Wrong Social Insurance |
| In practice, remaining in the German social security scheme is frequently not possible because of the strict inclusion criteria. However, wrong social security arrangements made due to ignorance can result in substantial problems on returning back home, in particular in the old-age pension scheme and unemployment insurance. For instance, if it is found during a social security audit that the employee was not obliged to contribute to German social security insurance, then the contributions made are paid back. But at the same time, substantial gaps appear in the employee’s entitlement to benefits, and as a result the company may be sued for damages accordingly. |
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