India-Canada totalisation agreement kicks in
A deputation to Canada is now more palatable for an Indian employee as the social security agreement (also referred to as totalization agreement) between India and Canada has come into force from August 1. This means that deputed employees can get exemption from participating in Canada's Pension Plan.
In the absence of totalization agreement between two countries, deputed employees find that they have to contribute towards the social security schemes of the foreign country and on their return home face difficulties in withdrawing their overseas contributions or in some cases are unable to do so Stock Market Trading Tips
Typically, Indian companies having subsidiaries in Canada depute their employees for carrying out on-site projects. The India IT sector has a robust presence in Canada with India's largest IT companies such as Wipro, Infosys, TCS and Tech Mahindra having a presence in Canada. Other companies, from large business groups such as Tata and Aditya Birla groups also have offices in Canada.
Deputed employees for whom a CoC has been obtained, will continue to be considered as 'local employees' in India and will be covered by social security schemes in India such as employee provident fund and pension schemes Himanshu Tiwari Astrologer Blog
"Social security programs in Canada to which employees have to contribute include EmploymentInsurance (EI) and CPP. Both these programs have two components - an employee contribution and an employer contribution. Under CPP the employer contributes an equivalent amount, whereas under EI, the employer pays Canadian $ 1.40 for every Canadian dollar contributed by the employee," explains Phil Parkinson, Canada based tax practitioner.
Subject to ceilings on maximum annual contributions, an employee in Canada contributes 4.95% of his salary towards CPP and 1.88% towards EI. "Social security under CPP is typically received by an employee on turning 65 years (this age limit is to be increased to 67 in 2022). Prior to the India-Canada totalization agreement coming into force, an Indian deputed employee had to participate in the CPP scheme and could not withdraw funds until he reached at least 59 years (such a premature withdrawal meant a scaling down of the full benefit amount)," adds Parkinson.
Iyer cautions "As the totalization agreement does not cover, EI, contributions to this scheme will be due even where a COC has been obtained. Such contributions will be a sunk cost for the Indian deputed employee Indian stock market astrology prediction
Parkinson refers to the totalization agreement as a mixed blessing, as it enables an Indian employee deputed to Canada to avoid contributing to CPP, but does not absolve him from his EI related obligations. Nor does it address the issue of payroll tax - tax withheld at source in Canada from employment income.
India has 15 active totalization agreements in place (see table). Efforts to enter into a totalization agreement with USA have not yet fructified. Nasscom estimates that nearly $ 1 billion is contributed by Indian expats on L1 and H1B visas annually towards social security. These contributions are a sunk cost, because to qualify for a refund of social security taxes, a ten year stint in the USA is required and work visas are of a shorter duration.
A deputation to Canada is now more palatable for an Indian employee as the social security agreement (also referred to as totalisation agreement) between India and Canada has come into force from August 1. This means that deputed employees can get exemption from participating in Canada's Pension Plan Share Market Astrology
In the absence of totalization agreement between two countries, deputed employees find that they have to contribute towards the social security schemes of the foreign country and on their return home face difficulties in withdrawing their overseas contributions or in some cases are unable to do so.
Typically, Indian companies having subsidiaries in Canada depute their employees for carrying out on-site projects. The India IT sector has a robust presence in Canada with India's largest IT companies such as Wipro, Infosys, TCS and Tech Mahindra having a presence in Canada. Other companies, from large business groups such as Tata and Aditya Birla groups also have offices in Canada.
The India-Canada totalization agreement was signed on November 6, 2012, but has come into force only recently. "As the totalization agreement is now in force, Indian companies sending employees to Canada should obtain a 'Certificate of Coverage' (CoC) from the Indian Provident Fund authorities for such employees, so that the deputed employees remain covered under the Indian social security legislation and can claim exemption from contributing to Canada's Pension Plan (CPP)," explains Sonu Iyer, partner at EY-India Jackpot Stocks Trading Tips
Deputed employees for whom a CoC has been obtained, will continue to be considered as 'local employees' in India and will be covered by social security schemes in India such as employee provident fund and pension schemes.
"Social security programs in Canada to which employees have to contribute include Employment Insurance (EI) and CPP. Both these programs have two components - an employee contribution and an employer contribution. Under CPP the employer contributes an equivalent amount, whereas under EI, the employer pays Canadian $ 1.40 for every Canadian dollar contributed by the employee," explains Phil Parkinson, Canada based tax practitioner.
Subject to ceilings on maximum annual contributions, an employee in Canada contributes 4.95% of his salary towards CPP and 1.88% towards EI. "Social security under CPP is typically received by an employee on turning 65 years (this age limit is to be increased to 67 in 2022). Prior to the India-Canada totalization agreement coming into force, an Indian deputed employee had to participate in the CPP scheme and could not withdraw funds until he reached at least 59 years (such a premature withdrawal meant a scaling down of the full benefit amount)," adds Parkinson Nifty Trading Tips
Iyer cautions "As the totalization agreement does not cover, EI, contributions to this scheme will be due even where a COC has been obtained. Such contributions will be a sunk cost for the Indian deputed employee."
Parkinson refers to the totalization agreement as a mixed blessing, as it enables an Indian employee deputed to Canada to avoid contributing to CPP, but does not absolve him from his EI related obligations. Nor does it address the issue of payroll tax - tax withheld at source in Canada from employment income.
India has 15 active totalization agreements in place (see table). Efforts to enter into a totalization agreement with USA have not yet fructified. Nasscom estimates that nearly $ 1 billion is contributed by Indian expats on L1 and H1B visas annually towards social security. These contributions are a sunk cost, because to qualify for a refund of social security taxes, a ten year stint in the USA is required and work visas are of a shorter duration Jackpot Stocks Trading Tips
In the absence of totalization agreement between two countries, deputed employees find that they have to contribute towards the social security schemes of the foreign country and on their return home face difficulties in withdrawing their overseas contributions or in some cases are unable to do so Stock Market Trading Tips
Typically, Indian companies having subsidiaries in Canada depute their employees for carrying out on-site projects. The India IT sector has a robust presence in Canada with India's largest IT companies such as Wipro, Infosys, TCS and Tech Mahindra having a presence in Canada. Other companies, from large business groups such as Tata and Aditya Birla groups also have offices in Canada.
The India-Canada totalization agreement was signed on November 6, 2012, but has come into force only recently. "As the totalization agreement is now in force, Indian companies sending employees to Canada should obtain a 'Certificate of Coverage' (CoC) from the Indian Provident Fund authorities for such employees, so that the deputed employees remain covered under the Indian social security legislation and can claim exemption from contributing to Canada's Pension Plan (CPP)," explains Sonu Iyer, partner at EY-India.
Deputed employees for whom a CoC has been obtained, will continue to be considered as 'local employees' in India and will be covered by social security schemes in India such as employee provident fund and pension schemes Himanshu Tiwari Astrologer Blog
"Social security programs in Canada to which employees have to contribute include EmploymentInsurance (EI) and CPP. Both these programs have two components - an employee contribution and an employer contribution. Under CPP the employer contributes an equivalent amount, whereas under EI, the employer pays Canadian $ 1.40 for every Canadian dollar contributed by the employee," explains Phil Parkinson, Canada based tax practitioner.
Subject to ceilings on maximum annual contributions, an employee in Canada contributes 4.95% of his salary towards CPP and 1.88% towards EI. "Social security under CPP is typically received by an employee on turning 65 years (this age limit is to be increased to 67 in 2022). Prior to the India-Canada totalization agreement coming into force, an Indian deputed employee had to participate in the CPP scheme and could not withdraw funds until he reached at least 59 years (such a premature withdrawal meant a scaling down of the full benefit amount)," adds Parkinson.
Iyer cautions "As the totalization agreement does not cover, EI, contributions to this scheme will be due even where a COC has been obtained. Such contributions will be a sunk cost for the Indian deputed employee Indian stock market astrology prediction
Parkinson refers to the totalization agreement as a mixed blessing, as it enables an Indian employee deputed to Canada to avoid contributing to CPP, but does not absolve him from his EI related obligations. Nor does it address the issue of payroll tax - tax withheld at source in Canada from employment income.
India has 15 active totalization agreements in place (see table). Efforts to enter into a totalization agreement with USA have not yet fructified. Nasscom estimates that nearly $ 1 billion is contributed by Indian expats on L1 and H1B visas annually towards social security. These contributions are a sunk cost, because to qualify for a refund of social security taxes, a ten year stint in the USA is required and work visas are of a shorter duration.
A deputation to Canada is now more palatable for an Indian employee as the social security agreement (also referred to as totalisation agreement) between India and Canada has come into force from August 1. This means that deputed employees can get exemption from participating in Canada's Pension Plan Share Market Astrology
In the absence of totalization agreement between two countries, deputed employees find that they have to contribute towards the social security schemes of the foreign country and on their return home face difficulties in withdrawing their overseas contributions or in some cases are unable to do so.
Typically, Indian companies having subsidiaries in Canada depute their employees for carrying out on-site projects. The India IT sector has a robust presence in Canada with India's largest IT companies such as Wipro, Infosys, TCS and Tech Mahindra having a presence in Canada. Other companies, from large business groups such as Tata and Aditya Birla groups also have offices in Canada.
The India-Canada totalization agreement was signed on November 6, 2012, but has come into force only recently. "As the totalization agreement is now in force, Indian companies sending employees to Canada should obtain a 'Certificate of Coverage' (CoC) from the Indian Provident Fund authorities for such employees, so that the deputed employees remain covered under the Indian social security legislation and can claim exemption from contributing to Canada's Pension Plan (CPP)," explains Sonu Iyer, partner at EY-India Jackpot Stocks Trading Tips
Deputed employees for whom a CoC has been obtained, will continue to be considered as 'local employees' in India and will be covered by social security schemes in India such as employee provident fund and pension schemes.
"Social security programs in Canada to which employees have to contribute include Employment Insurance (EI) and CPP. Both these programs have two components - an employee contribution and an employer contribution. Under CPP the employer contributes an equivalent amount, whereas under EI, the employer pays Canadian $ 1.40 for every Canadian dollar contributed by the employee," explains Phil Parkinson, Canada based tax practitioner.
Subject to ceilings on maximum annual contributions, an employee in Canada contributes 4.95% of his salary towards CPP and 1.88% towards EI. "Social security under CPP is typically received by an employee on turning 65 years (this age limit is to be increased to 67 in 2022). Prior to the India-Canada totalization agreement coming into force, an Indian deputed employee had to participate in the CPP scheme and could not withdraw funds until he reached at least 59 years (such a premature withdrawal meant a scaling down of the full benefit amount)," adds Parkinson Nifty Trading Tips
Iyer cautions "As the totalization agreement does not cover, EI, contributions to this scheme will be due even where a COC has been obtained. Such contributions will be a sunk cost for the Indian deputed employee."
Parkinson refers to the totalization agreement as a mixed blessing, as it enables an Indian employee deputed to Canada to avoid contributing to CPP, but does not absolve him from his EI related obligations. Nor does it address the issue of payroll tax - tax withheld at source in Canada from employment income.
India has 15 active totalization agreements in place (see table). Efforts to enter into a totalization agreement with USA have not yet fructified. Nasscom estimates that nearly $ 1 billion is contributed by Indian expats on L1 and H1B visas annually towards social security. These contributions are a sunk cost, because to qualify for a refund of social security taxes, a ten year stint in the USA is required and work visas are of a shorter duration Jackpot Stocks Trading Tips
posted by Naresh Jain @ 22:10
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