Similarly, employers should receive a certificate of coverage in India in respect of Indian workers who are on assignment in Japan and/or claim benefits applicable to Japanese social security The time of service provided by a worker in the host country is added for the purposes of the eligibility conditions provided for by the social security scheme applicable in the country of origin. under certain conditions. Benefits that international assignees acquire under their respective social security schemes may be paid on a lump sum basis under certain conditions. Japanese and Indian employers who send workers to work in the other country should consult with their qualified global tax, social security or mobility experts to determine that the main purpose of the SSA is to ensure that workers posted from one country to another internationally do not pay double taxes on social security. This can help reduce the cost of international operations from Japan to India and from India to Japan. These workers can now remain insured during working hours in the social security of their country of origin and apply for an exemption from the social security of the host country. In addition, this SSA promotes the principle of reciprocity with regard to the benefits incurred by workers posted to the other country by their employers. This should help workers who are trying to decide whether they agree to travel to Japan or India to make a positive decision in favour of posting, knowing that the social security contributions they pay in the country where they work are added to the contribution period in their home country in order to determine entitlement to benefits. Benefits that international transfers acquire under the social security legislation of one country are “exportable” to the other country. Workers from one country posted by their employers to the other country for short-term operations can benefit from an exemption from social security contributions for a maximum period of five years in the host country. Access exclusive Economic Times stories, guide and expert reviews to Select Reason below and click the Report button. This tells our moderators to take action. For more information or assistance, please contact your local GMS or People specialist or the following professional from KPMG International member company in India: 1 See the website of the Ministry of External Affal Affairs Media Center, “India-Japan Social Security Agreement”.

SSA between India and Japan has taken almost 4 years to enter into force since it was signed in November 2012. The entry into force of this SSA is a welcome step, as this SSA will have a significant impact on employers who have workers between India and Japan. This Flash Alert GMS briefly refers to the Social Security Agreement between India and Japan, signed on 16 November 2012, which entered into force on 1 October 2016. This article is approved by “India`s social security agreement with Japan will be approved from the 1st in TaxNewsFlash (July 21, 2015), a publication of the member company KPMG International in India. 2. Article 28 SSA prevails for the agreement to enter into force on the first day of the fourth month following receipt of the last notification. On 20 July 2016, the two governments exchanged obligations in accordance with Article 28 and notified the completion of the constitutional and legal procedures necessary for the entry into force of the agreement. Companies that have incoming delegates in India or outgoing transferees in Japan may wish to review their allocation guidelines to make changes to reflect the terms of the new SSA.

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