Finally, the Tribunal found that if the court did not properly verify the importance of an international agreement, pre-trial detention was appropriate. As the court found in pre-trial detention, the tax court could insist on a full presentation of the issues by counsel, participate in its own investigation, conduct a hearing or request amicus submissions from the United States to its position, and ask the Department of Foreign Affairs to present the views of the foreign government. Self-employed workers are also exempt from double taxation by two social security schemes. However, the country in which contributions must be defined differently depends on the source of income of social security, the duration of self-employment (extended or random income) and, for some countries, by nationality and not residence (i.e. Italian nationals contribute to the Italian scheme, while non-citizens residing in Italy contribute to the US social security system). To be sure that the country in which you will pay your contributions, be sure to inquire about the agreement that is (if any) between the United States and the foreign country in which you live and work. The table below outlines the different types of social security benefits to be paid under the social security plans of the United States and France and briefly outlines the eligibility requirements normally applicable to each type of benefit. If you do not qualify for these benefits, the agreement can help you qualify (see « How Benefits Can Be Paid »). Self-employed workers who, in the absence of the agreement, would have to pay social security contributions to both countries are subject to special rules (see table below). The agreements also have a positive effect on the profitability and competitive position of companies operating abroad by reducing their business costs abroad.
Companies with staff stationed abroad are encouraged to use these agreements to reduce their tax burden. As a precautionary measure, it should be noted that the derogation is relatively rare and is invoked only in mandatory cases. There are no plans to give workers or employers the freedom to regularly choose coverage that contradicts normal contractual rules. Totalization agreements are extremely important because American expatriates who live and work abroad can face double taxation when it comes to social security if such an agreement does not exist. You are especially important when you are independent. There are usually specific rules on autonomy and social security and it is important to understand all the details if you are in a country with which the United States has a totalization agreement. A totalization agreement is an agreement between two countries that prevents double social security contributions for the same income. At this point, the United States has active totalization agreements with 24 countries. To find out which countries have reached an agreement with the United States, take a look at the IRS list of social security conventions.
You will see that they are most often related to developed countries and not to emerging countries. Through the totalization of covered working hours, the provisions of this agreement were clearly intended to protect workers whose careers have been shared between the two countries and to ensure that they are not penalized when they retire.