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    Italy – Social Security Agreement with Japan Enters into Force

    GMS Flash Alert 2024-095 | April 18, 2024

    The Agreement on Social Security between the Italian Republic and Japan entered into force on 1 April 2024.1  The Agreement had been signed by the two countries in 2009 and ratified by Italy in 20152.  The entry into force follows the signing of the related Administrative Arrangement (intesa amministrativa) in August 2023.  

    WHY THIS MATTERS

    This Agreement is mainly intended to solve the problem of double social security contributions for employees temporarily posted from Japan to Italy and vice versa (Art. 7, paragraphs 1, 2, and 3 of the Agreement); in particular, as of 1 April, these employees will be covered, in principle, only by the pension system of the country from which they were posted, provided that the period of posting does not exceed five years.

    The Agreement provides the possibility of extension, following authorisation by the competent authorities of both Contracting States, as long as the maximum duration of the posting period and its extension do not exceed a total of ten years.

    The Agreement also applies to the case of a person temporarily self-employed in the territory of the other Contracting State (Art. 7, paragraphs 4 and 5 of the Agreement).

    The totalisation of insurance periods for pension purposes is not provided for in the Agreement.

    Target

    The scope of the Agreement concerns persons who are, or have been, subject to the legislation of a Contracting State, as well as their family members regardless of their citizenship.  

    Operational Instructions 

    With Circular No. 52 of 27 March 2024, the Italian Social Security Institution (Istituto Nazionale Previdenza Sociale, INPS) has now provided operational instructions for the requests of contribution coverage certificates.3

    Specifically, in cases where a worker, by derogation from the principle of territoriality of the applicable legislation, is subject to Italian social security insurance, the INPS, at the request of the employer or the worker, must issue the certificate of contribution coverage form “IT/JPN 101.”  For an extension, the request to continue to have Italian legislation apply must be submitted to the Ministry of Labour and Social Policy (Ministero del Lavoro e delle Politiche Sociali), as the competent authority for Italy.

    For postings from Japan to Italy, the workers who want to be exempted from the application of Italian social security insurance must submit a specific application form to the relevant Japanese institutions to obtain the issuance of the “JPN/IT 101” contribution coverage certificate.

    Contribution relief can be granted retroactively only as of 1 April 2024, provided the posting application is submitted within the transitional period, as agreed by the Contracting States, of six months (1 October 2024), with the addition of one month (1 November 2024) from the date of entry into force of the Agreement itself.

    However, despite the fact that there is a certificate of coverage attesting to the application of Japanese legislation, the employer is still required to pay in Italy some minor monthly contributions that are not exempted by the Social Security Agreement.

    KPMG INSIGHTS

    The Agreement between Italy and Japan on social security is expected to enhance cross-border business and promote mobility of workers between the two countries by eliminating double social security taxation of the same earnings.  The Agreement will help ensure that workers pay into one social security system at a time. 

    Employers and employees that have concerns or questions about eligibility, conditions, and practical steps for availing of the benefits of the new Agreement may wish to reach out to their usual social security and/or global mobility professional or a member of the GMS team with KPMG in Italy (see the Contacts section).

    Contacts

    pierluigi-zucchelli
    Pierluigi Zucchelli

    Associate Partner, KPMG Italy

    KPMG in Italy

    Footnotes

    1  Accordo tra la Repubblica italiana e il Giappone sulla sicurezza sociale, firmato a Roma il 6 febbraio 2009, ratificato con la legge 18 giugno 2015, n. 97, pubblicata nella Gazzetta Ufficiale n. 156 dell’8 luglio 2015, e Accordo amministrativo del 30 agosto 2023 in vigore dal 1° aprile 2024.

    Ministero del Lavoro e delle Politiche Sociali, "Sicurezza sociale, il primo aprile 2024 in vigore accordo Italia-Giappone" (16 gennaio 2024).

    2  See (in Italian): LEGGE 18 giugno 2015, n. 97 - Normattiva. 

    3  Istituto Nazionale Previdenza Sociale, Circolare numero 52 del 27-03-2024.    

    Disclaimer

    The information contained in this newsletter was submitted by the KPMG International member firm in Italy.

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