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Cablegate: Czech Republic Is First in the Region to Sign

VZCZCXRO1177
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHPG #1032 2501425
ZNR UUUUU ZZH
R 071425Z SEP 07 ZDK
FM AMEMBASSY PRAGUE
TO RUEHC/SECSTATE WASHDC 9584
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHFDY/SOCIAL SECURITY ADMIN BALT MD
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS PRAGUE 001032

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: CASC ECON EFIN EZ
SUBJECT: CZECH REPUBLIC IS FIRST IN THE REGION TO SIGN
BILATERAL SOCIAL SECURITY TOTALIZATION AGREEMENT WITH USG


1. Ambassador Richard Graber and Czech Minister for Labor and
Social Affairs Petr Necas signed the U.S.-Czech Bilateral
Social Security Totalization Agreement at the Ministry of
Labor and Social Affairs on September 7, 2008. Social
Security Administration Associate Commissioner Rogelio Gomez
and American Chamber of Commerce Executive Director Weston
Stacey attended the signing ceremony. This agreement will
exempt U.S. citizens working for U.S. companies in the Czech
Republic from having to pay social security taxes to both
countries. Similarly, it will remove the double taxation
requirement for Czech citizens working for Czech companies in
the United States.

2. Once the treaty has been signed, it must go through a
ratification process, which is expected to take approximately
five to seven months. The agreement then has a provision
that stipulates that the treaty will take effect on the first
day of the third month after notification of ratification
from both countries. Timely ratification is of the essence
due to a new law in the Czech Republic that will make it
compulsory for all citizens from non-treaty countries working
in the Czech Republic to pay Czech social security taxes
starting January 1, 2008, with the option to defer payment
until September 2008. The United States currently has 21
bilateral totalization agreements in force around the world.
The Czech Republic is the first among Central and Eastern
European countries to sign such an agreement in the Untied
States.
GRABER

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