EPFO circular on India’s SSA with the Federative Republic of Brazil

Introduction

The Employees’ Provident Fund Organization (“EPFO”), India, issued a circular on February 13, 2024, in light of the enforcement of the Social Security Agreement (“SSA”) between India and the Federative Republic of Brazil, effective January 1, 2024.

Implications of the SSA

As per Article 11 of the SSA, if an employee;

• is covered by the legislation of a country (home country); and
• was sent by an employer who is subject to the legislation of that country to work in the territory of the other country; and
• is working in the territory of the other country in the employment of the employer or a related entity of that employer; and
• is not working permanently in the territory of the other country; and
• a period of 36 months, with or without split, in the other country has not lapsed; the employer and the employee will be subject only to the legislation of the home country in relation to the work performed and the remuneration paid for that work.

The period of 36 months may be extended to 24 months, with or without split, with the mutual written consent of the Indian Ministry of External Affairs and Brazil’s Ministry of Economy. 

Under Article 13 of the SSA, the competent authority/institution of a country shall issue, upon request of the employer, a certificate stating that the employee is subject to the legislation of that country and indicating the duration for which the certificate shall be valid.

It is pertinent to note that legislations for the purpose of SSA in relation to India covers legislations concerning old-age and survivors’ pensions and permanent total disability pensions (Article 2 of the SSA).

EPFO directions

The EPFO, in its circular dated February 13, 2024, stated that under the SSA, the employees of one country deputed by their employers to the other country on short-term assignments up to a period of 36 months are exempted from social security contributions in that country on the basis of a “certificate of coverage” (“COC”). In view of the same, the concerned employee, through his or her employer, may apply for COC at the concerned Regional Office, EPFO. The Regional Offices are directed to ensure that on receipt of the application in all respects, necessary action is taken for issuing COC in accordance with the consolidated guidelines issued by the Head Office by letter No. IWU/7(15)2011/Gen(Software)/9209 dated August 13, 2013 and IWU/7(31)2017/Application for COC and COC Software dated November 20, 2018.