TN 5 (06-14)

A. Introduction to the self-employment rule

Work activity that the U.S. considers self-employment under U.S. Social Security law often qualifies as self-employment under Slovak law. Under the agreement, a self-employed worker is generally subject to only the laws of the country in which the worker performs the work. However, the agreement provides for an exception if a person transfers his or her self-employment activity from country to the other for five years or less. In that case, the self-employment activity remains subject to the social security laws of the country from which the worker transferred the activity and exempt from social security coverage and taxation in the other country.

B. Process to establish exemption from paying U.S. Social Security self-employment taxes

A self-employed U.S. citizen, who is subject only to Slovak social security taxes and contributions under the agreement, must take the following actions to prove their exemption from U.S. Social Security self-employment tax:

• request a certificate of coverage from the Slovak authorities; and

• attach a photocopy of the Slovak certificate or coverage to their U.S. tax return every year.

C. References

RS 02002.305 Certificates of Coverage under the Agreement with the Slovak Republic