What is Certificate of Coverage?
Official proof that a worker is covered by one country's social security system and exempt from the other's under a Totalization Agreement.
Definition
A Certificate of Coverage (COC) is an official document proving that a worker is covered by one country's social security system and therefore exempt from paying social security taxes in the other country under a Totalization Agreement. US workers temporarily assigned abroad (generally up to 5 years) can obtain a COC from the SSA to prove US Social Security coverage and avoid foreign social insurance contributions. Foreign workers in the US obtain certificates from their home country.
Who Needs to Know This?
US workers temporarily assigned to a country with a Totalization Agreement, and foreign workers temporarily in the US who want to avoid dual social security taxation.
Key Deadline
Should be obtained before beginning foreign assignment; can be requested retroactively
Potential Penalties
Without a COC, you may be required to pay into both countries' social security systems
Related Forms
Common Mistakes to Avoid
- 1Not obtaining the COC before starting the foreign assignment
- 2Not knowing the 5-year limit for temporary assignments
- 3Employers not requesting COCs for transferred employees
- 4Not presenting the COC to the foreign tax authority
Related Terms
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