Blog Country Specific Expat Tax Situations

Does the US-Switzerland Totalization Agreement Stop Double Social Security Tax?

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Yes, the US-Switzerland totalization agreement eliminates double Social Security taxation on the same earnings. The US currently has 30 active totalization agreements that prevent workers from paying Social Security taxes to both countries simultaneously, and Switzerland is one of them.

This agreement determines whether you pay Social Security taxes to the US or Switzerland based on your employment duration and circumstances. If your US employer sends you to Switzerland temporarily (under five years), you’ll continue paying US Social Security. You’ll pay into the Swiss system for longer assignments or direct Swiss hiring instead.

The relief comes through a simple Certificate of Coverage, proof that you’re paying taxes to one country while being exempt from the other. Here’s how to claim your exemption and stop paying Social Security taxes twice.

The totalization agreement establishes clear rules based on your specific employment situation:

For Employees

Your US employer assigns you to Switzerland for less than five years
You maintain employment with the US company during your Swiss assignment
Your assignment is temporary with a planned return to the US

You have worked in Switzerland for five years or longer
You were hired directly by a Swiss company
You establish permanent residence in Switzerland

For Self-Employed Individuals

You operate your business only in the US
You temporarily transfer your business to Switzerland for five years or less

You operate your business only in Switzerland
You transferred your business from the US for less than five years

The five-year threshold is the key determining factor. This rule prevents the double taxation that could otherwise cost you thousands annually in unnecessary Social Security contributions.

What Is a Certificate of Coverage and How Do I Get One?

A Certificate of Coverage provides official documentation that you’re paying Social Security taxes in one country, exempting you from paying in the other. This eliminates double taxation concerns and provides peace of mind.

Application Process for Employees

Seeking exemption from Swiss Social Security: Your employer must request Form USA/CH 10 from the US Social Security Administration. This can be completed online at SSA.gov or submitted by mail.
Seeking exemption from US Social Security: Your employer should request Form CH/USA 10 from the appropriate Swiss compensation fund.

Important

Start this process before beginning work abroad. While certificates can be applied retroactively, early application prevents any temporary period of double taxation.

Self-Employed Application Steps

Contact the Social Security Administration in the country where you’re paying taxes:

Paying US taxes: Submit your request online through SSA.gov
Paying Swiss taxes: Write to the Swiss compensation fund in your canton of residence

What Information Do I Need for My Certificate Application?

Gather these details before submitting your request:

Personal Information:

Full legal name
Date and place of birth
Citizenship status
Country of permanent residence
US Social Security Number and Swiss Social Security Number (if applicable)

Employment Details:

Date of hire and country where hired
Complete employer names and addresses in both countries
Transfer date and anticipated return date
For self-employed: nature of business activity and performance dates

Having complete documentation ready speeds up processing and reduces delays that could affect your tax obligations.

When Does My Certificate Take Effect?

Your certificate typically becomes effective on the date you began working in the foreign country. Since coverage can be applied retroactively, you can correct past double taxation situations if you discover the agreement later.

Processing timeline:

Certificate applications generally take 4-8 weeks to process
Retroactive application covers your entire period of foreign work
Early application prevents compliance gaps and temporary double taxation

What Should I Do After Receiving My Certificate?

For Employees

Swiss-issued certificates:

Your employer retains the certificate for potential IRS audits
No requirement to file with the IRS unless specifically requested
Serves as proof of exemption from the US Social Security tax

US-issued certificates:

Present to Swiss authorities when required by local regulations
Demonstrates exemption from Swiss Social Security obligations
Your employer typically handles Swiss compliance requirements

For Self-Employed (Critical Annual Requirement)

You must attach your Swiss certificate to your US tax return every year. This step proves your exemption from the 15.3% self-employment tax on your US income.

Failing to attach this certificate annually can result in paying both the US self-employment tax and the Swiss Social Security, defeating the purpose of the totalization agreement.

Can I Use Other Expat Tax Benefits Alongside the Totalization Agreement?

Yes, the totalization agreement works independently of other expat tax protections. You can still use:

Foreign Earned Income Exclusion: Exclude up to $130,000 (2025 tax year) of foreign earned income
Foreign Tax Credit: Dollar-for-dollar credit for Swiss income taxes paid
Foreign Housing Exclusion: Additional exclusion for qualifying housing expenses

These protections work together. The totalization agreement handles Social Security taxes, while FEIE and Foreign Tax Credit address income taxes, providing comprehensive double taxation relief.

What Are Common Mistakes That Cost Money?

Delayed applications: Waiting too long to request certificates can result in temporary double Social Security taxation during processing.
Missing annual attachments: Self-employed individuals must attach certificates to US returns every year. Missing this step triggers US self-employment tax.
Employer confusion: Some employers don’t understand their role in requesting certificates, causing delays and compliance issues.
Assuming automatic exemption: The agreement requires proper documentation through certificates. Relief isn’t automatic without the paperwork.

How Much Money Can This Agreement Save Me?

Corporate expat example: Sarah, transferred from Boston to Zurich for three years, avoids Swiss Social Security contributions. On a $100,000 salary, this saves approximately $10,000-$15,000 annually in avoided double Social Security taxation.

Self-employed consultant example: Mark, permanently relocating his consulting business to Geneva, obtains a Swiss certificate and avoids the 15.3% US self-employment tax. On $75,000 of income, this saves $11,475 annually.

These savings compound over years of foreign residence, making proper application of the totalization agreement a significant financial benefit.

What If I Made Mistakes in Previous Years?

If you’ve been paying Social Security taxes to both countries, you can often correct this retroactively. The Streamlined Filing Procedures may help you catch up on missed filings while claiming appropriate exemptions.

Certificates of coverage can be applied retroactively, potentially allowing refunds of overpaid Social Security taxes. Each situation is unique, making professional guidance valuable for correcting past years.

When Should I Get Professional Help?

The totalization agreement is just one piece of a complex international tax picture. Between foreign earned income exclusions, foreign tax credits, and various reporting requirements, the complete tax strategy often requires expert guidance.

No matter how late, messy, or complex your return may be, we can help. You’ll have peace of mind, knowing that your taxes were done right.

Ready to eliminate double Social Security taxation and simplify your expat tax obligations? If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.

Whether you’re years behind or just unsure about the thresholds, our team is ready to help.

Your clear path to compliance starts here.

This information is for educational purposes only and should not be considered as personalized tax advice. Individual circumstances vary, and professional consultation is recommended for specific situations.