Tax alert 35 – Law 262/2018 for ratifying the Agreement between Romania and the Oriental Republic of Uruguay on social security signed at Montevideo on 13 September 2017

Agreement between Romania and the Oriental Republic of Uruguay on social security

On 14 November 2018, the Social Security Agreement between Romania and the Oriental Republic of Uruguay, signed on 13 September 2017 in Montevideo, was ratified.

We have summarized the most important aspects below:

Purpose of the Agreement

The purpose of the agreement is the recognition and the totalization of social security insurance periods realized on both states’ territories, determining the applicable legislation in the case of migrant workers, the equality of treatment, as well as the export of benefits.

Benefits covered

The Agreement will apply to Romanian legislation regarding:

  • old age (for the age limit, anticipated and partially anticipated), invalidity and survivorship pension compensation;
  • death grant; and
  • child state allowance.

For the Oriental Republic of Uruguay, the Agreement will apply to legislation regarding:

  • benefits from pension insurance covering old-age, invalidity and survivors’ risks; and
  • contributory scheme for family benefits.

Totalization of the covered periods

In the case of old age, invalidity and survivorship compensations, the Agreement provides that the totalization shall account both for coverage periods realized in the Contracting States, as well as coverage periods realized according to the legislation of a third-party state with which both Contracting States have established social security agreements that provide for the totalization of coverage periods.

Applicable legislation in the case of migrant workers

Based on the special regulations, seconded individuals will be subject to the legislation of the employer’s contracting state for the duration of performing a temporary activity on the territory of the other contracting state for periods up to 24 months, provided that the undertaking where they are hired carries out significant activities in the territory of the Contracting State of origin.

Exceptions from the general regulations can be agreed by common agreement by the relevant authorities from both countries.

Other aspects

The Agreement has been signed for an undetermined duration, and has entered into force from 21 November 2018.

The Agreement will not grant any rights for periods preceding its entry into force.

An Administrative Arrangement for the application of this Agreement will be agreed by the competent authorities.

 

Author: Andreea Cosmanescu – Senior Manager, People Advisory Services

 

For additional information, please contact:

Alex Milcev, Partner – Head of Tax & Legal

Email: office@ro.ey.com



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