India, Sweden sign social security pact to relieve workers from double taxation

NEW DELHI: India and Sweden today signed a social security agreement that will relieve their workers from double taxation and provide for cooperation in areas of labour market expansion and orderly migration.

The agreement was signed by Overseas Indian Affairs Minister Vayalar Ravi and Sweden's Minister for Social Security Ulf Kristersson.

Under the agreement, India workers on short-term contracts of up to two years will not be required to make any social security contribution in Sweden provided they continue to make social security payments India.

The relief will be available to Indian workers even if an Indian company sends its employees to Sweden from a third country. Officials said similar relaxation will be provided to Swedish citizens working in India.

As per the pact, Indian workers will be entitled to "export" of their social security benefits if they relocate to India after completion of their service in Sweden. Self- employed Indians will also be entitled to export of the benefits on their relocation to India.

"The government of India has taken the initiative to enagage in dialouges with different European countries to avoid double taxation and enable people to go and work there," Ravi said.

There are about 18,000 Indians in Sweden most of whom are working as professionals and self-employed.

According to Indian labour laws, all employees and employers falling under the purview of the Employees Provident Fund Act, 1952, are required to make mandatory contribution towards provident fund. A mandatory contribution fund is known by different names in different countries, such as social security in the US.