India and Denmark today signed a social security pact that will relieve their workers from double taxation and provide for cooperation in areas of labour market expansion and orderly migration.
India and Denmark today signed a social security pact that will relieve their workers from double taxation and provide for cooperation in areas of labour market expansion and orderly migration.
Under the agreement, workers on short term contracts will not be required to make any social security contribution in the country of employment provided they continue to make social security payments in the country of their origin.
The pact was signed by A Didar Singh, secretary in the Ministry of Overseas Indian Affairs and Denmark's minister for Employment Inger Stojberg.
Describing the pact as an "important agreement", Singh said it will further strengthen the bilateral relations between the two countries.
Stojberg also hoped that the pact will help both the countries in increasing their two-way trade.
Highlighting the feature of the pact, Singh said the agreement will enhance cooperation on social security between the two countries as it will protect the workers from double payment of social security contributions.
India already has signed an MoU on 'Labour Mobility Partnership' with Denmark in September last year to ensure smooth and safe migration of Indian workers there.
Singh said the migrant workers sent by Denmark-based companies to their Indian subsidiaries, or those sent by Indian companies to their subsidiaries in Denmark will be exempted from social security contribution.
Currently, over 13,000 Indians are working in Denmark.
While working abroad, these employees will only be subjected to the social security regulations of their home country.
Singh further said the pact provides that an employed or self-employed person will be subjected only to the legislation
of the host country. It also provides for "portability of the benefits" at the time of relocation to home country or a third country.
He said the agreement will also help enhance trade and investment between the two countries on account of reduction of corporate expenses on social security.
It was also decided to form a Joint Working Group to draw a detail framework to periodically examine implementation of the pact.
The agreement will come into effect after completion of the requisite procedures by both the countries.
India has signed Social Security agreements with Belgium, France, Germany, Switzerland, Luxembourg and the Netherlands in the recent past.
Similar agreements with other countries like Canada, South Korea, Czech Republic and the USA are underway.
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