A bilateral agreement is an accord signed between two countries to regulate a variety of issues. The aim of the agreement is to treat people who are covered by them on an equal footing with nationals, as well as to promote trade relations between both countries.

There are many types of agreements between states. Related to teleworking, the most relevant ones are:

Social Security agreements

These agreements are designed to ensure the protection of workers who are nationals of one country and work in the other country, and conversely.

Social Security agreements can regulate the contribution model and the social protection provided for workers in the system. Similarly, these agreements can regulate access to benefits such as retirement pensions.

Double taxation treaties

Double taxation treaties are agreements that aim to promote investment and economic relations between states. These agreements provide legal certainty and reduce the taxation of investments.

Applied to telework, these agreements are the regulatory rules for taxation. This avoids the teleworker having to pay taxes in both countries for his or her work activity.

What happens when there´s no agreement between two states?

In case you are in a country that does not have bilateral agreements with your home country, you will be more exposed to the authorities.

Firstly, because there´s no recognition of the contributions made by either country. This may affect benefits such as disability or retirement benefits.

Secondly, because you will have to face your tax obligations without a regulatory legal framework, so you´ll have to pay taxes in both countries for your activity.

Recommendations for teleworkers abroad

In the absence of international legislation on telework, bilateral agreements regulate telework. These agreements have been drawn up without considering the possibility of teleworking from another country because they were drawn up years ago.

People who want to telework from ther than their own should find out about the existing agreements between the two countries and the obligations they have as an individual vis-à-vis both administrations.

In the event that there are agreements in force, the particularities of the agreement must be taken into account. Each treaty is different and has its own exceptions. For example, one agreement may recognise and regulate the right to retirement and another may not.

If there are no agreements in force, the person must check if his or her administration offers some kind of special agreement to deal with his or her situation. In the case of Spain, for example, there is the possibility of benefiting from the special agreement for Spanish emigrants and their children working abroad and lay people, missionaries and aid workers, an agreement whereby the teleworker can pay contributions in Spain at the minimum contribution base to maintain his or her Spanish Social Security rights. Similarly, they must be familiar with tax regulations to make the corresponding tax declarations.