On 27 May 2024, Argentina and Switzerland signed a new Social Security Agreement (SSA)1. Entry into force of the SSA will happen once each of the parties notifies the other in writing of compliance with its constitutional and legal procedures required for the entry into force of this Agreement. It will legally come into force on the first day of the third month following the date of receipt of the last of these notifications.
WHY THIS MATTERS
The SSA between Argentina and Switzerland is expected to promote mobility of workers between the two countries by virtue of eliminating double social security taxation of the same earnings and by filling gaps in benefits protections for workers who have divided their careers between the two countries.
Generally speaking, a totalization agreement serves to ensure that workers pay into one social security system at a time and that they will benefit from the contributions made, regardless of where they have worked during their careers.
It is anticipated that this SSA will help boost cross-border employee assignments and business travel and cross-border business generally between Argentina and Switzerland.
Context
This is the first SSA between Argentina and Switzerland. It features in its provisions the usual attributes found in, and thus no departures from, other SSAs to which Argentina is a party.
Currently, Argentina has SSAs with the following European countries: Belgium, Slovenia, Spain, France, Greece, Italy, Luxembourg, and Portugal.
Under current arrangements, until the new SSA enters into force, the existing rules, governed by the two countries’ domestic legislation, apply. From a practical perspective, it is unusual to have situations of double social security taxation because in general assignees resign or go on leave without pay.
KPMG INSIGHTS
The Argentina-Switzerland SSA will enter into force after it has been approved by both countries.
For applicable social security rules and the liability (and future benefits) of mobile employees between Argentina and Switzerland currently, and how cross-border workers between the two countries will be impacted once the SSA comes into force, please consult with your professional international tax and social security adviser or a member of the GMS/tax team with KPMG in Argentina (see the Contacts section).
FOOTNOTE
1 Ministerio de Relaciones Exteriores, Comercio Internacional y Culto, (in English) "Argentina and Switzerland sign Social Security Agreement." Also available in Spanish at the same link.
Also see the LinkedIn post from Ministerio de Relaciones Exteriores, Comercio Internacional y Culto de la República Argentina by clicking here.
For the Acuerdo Administrativo paral la Aplicación del Convenio de Seguridad Social entre la República Argentina y la Confederación Suiza (in Spanish and French), click here.
The information contained in this newsletter was submitted by the KPMG International member firm in Argentina.
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