2007 press releases

U.S.-Czech Agreement on Social Security Payments

Prague, September 7, 2007

U.S. Ambassador Richard Graber and the Czech Deputy Prime Minister and Minister of Labor and Social Affairs Petr Ne�?as signed today an agreement that will remove the burden of paying social security taxes to both nations.  Under current law, U.S. citizens working for U.S. companies in the Czech Republic as well as Czech citizens working for Czech companies in the United States must make social security contributions to both governments. 

This agreement makes it possible for workers and their family members to qualify for pro-rated U.S. or Czech benefits based on combined credits from both countries.  This will result in approximately 4,400 U.S. and Czech workers receiving benefits after the first five years of the agreement.

In addition to lowering the tax burden for individuals, the agreement will improve social security protection for people who work in both countries.  At present, some workers who have divided their careers between the United States and the Czech Republic fail to qualify for social security benefits from one or both countries because they do not meet minimum eligibility requirements. 

U.S. Ambassador Graber noted: "The United States currently has many bilateral totalization agreements in force around the world, but the Czech Republic is the first country in Central and Eastern Europe to sign such an agreement with the United States.  It is an important agreement; one that ensures U.S. and Czech workers and their families receive the social security benefits they have worked for.  In addition, eliminating the burden of double taxation encourages stable, deeper business partnerships."

Before this agreement can take effect, it must be reviewed by the U.S. Congress and the Czech Parliament.  The United States has similar social security agreements with 21 other countries, including Australia, Canada, Chile, South Korea, Japan and nearly every country in Western Europe.