With the recent circular no. 52 dated March 27, 2024, the National Social Security Institute (INPS) has officially confirmed the entry into force of the new agreement between Italy and Japan on social security, originally signed in Rome on February 6, 2009, and subsequently ratified by Law no. 97/2015.
Scope of the agreement
This agreement, which will be operational from April 1, 2024, is of crucial importance for workers temporarily posted from Japan to the Italian Republic and vice versa, for whom there is currently an issue of double payment of insurance contributions in both countries.
Under the agreement, employees temporarily posted from one of the two countries to the other will, in principle, be covered only by the pension system of the country of origin, provided that the period of posting does not exceed five years.
The Agreement does not provide for the totalization of insurance periods for pension purposes.
Included in the application are the mandatory general insurance for disability, old age, and survivors, Special Management for self-employed workers, Separate Management, and replacement and exclusive managements of mandatory general insurance.
Provisions on Applicable Legislation
The Agreement is based on the principle of territoriality, according to which a worker who performs subordinate or autonomous activities in the territory of a contracting State is exclusively subject to the legislation of the State in which the activity is carried out (art. 6 of the Agreement).
However, Article 7 of the Agreement provides for derogations from this principle in order to manage situations of temporary variation of the workplace. Therefore, if a worker is temporarily posted by their employer in the territory of the other contracting State, they remain subject to the legislation of the first State, provided that the posting period does not exceed 5 years, extendable upon authorization of the competent authorities of both contracting States, up to a total period of 10 years (par. 3, art. 3 of the Administrative Agreement of August 30, 2023). Self-employed workers may benefit from the same derogation.
Articles 8 and 9 of the Agreement provide for special provisions for personnel employed on board ships, public employees, and assimilated persons.
Procedure for Requesting Exemption
Article 3 of the Administrative Agreement of August 30, 2023 provides that when the legislation of a contracting State applies to a worker under Articles 7, 8, 9, 10, or 13 of the Agreement, the competent institutions of the respective contracting States are required, upon request of the interested parties, to issue a certificate attesting that the worker is subject to such legislation and indicating the validity period of the certificate.
The certificate constitutes proof that the worker is exempt from the legislation on mandatory coverage of the other contracting State.
Workers posted by an Italian employer who are employed in Japan
In the event that a worker is subject to Italian insurance in derogation of the principle of territoriality, the competent structures of the INPS will issue, upon request of the employer or the worker, the certificate of contribution coverage using the appropriate “IT/JPN 101” model. A copy of the certificate must be sent to the competent authority in Japan.
In the case of extension, the request to maintain Italian legislation must be submitted to the Ministry of Labor and Social Policies, as the competent authority for Italy.
Workers posted by a Japanese employer who are employed in Italy
In the case of a worker covered by the Japanese social security system sent to Italy, the competent Japanese authorities will issue the certificate of contribution coverage using the same “IT/JPN 101” model. The certificate must be provided to the Italian employer and Italian authorities if requested.
Workers with Dual Contracts
The exchange of notes of January 13, 2023, and January 19, 2023, added specific clarifications on the application of the provisions of Article 7 of the Agreement, in cases where the posted worker in one of the contracting States concludes a local employment contract with the posting company.
In these cases, the worker holding two employment contracts may request to be exempted, limited to the insurance forms provided by the Agreement, from the application of the legislation of the other State where they carry out work, even for the contract concluded at a later time during the posting period.
To request exemption from the application of Italian legislation regarding the “second contract,” it is necessary to submit a specific application form to the territorial structure of the INPS competent for the Italian posting company, accompanied by the certificate of coverage “JPN/IT 101” issued by the Japanese authorities.
The circular specifies that the validity period of the exemption cannot exceed the deadline provided in the certificate and that, pending the decision on granting the exemption from dual contracts, the Italian company is obliged to fulfill the contribution obligations under Italian legislation.
Transitional Provisions
The INPS circular clarifies that the contribution exemption can be granted from April 1, 2024, only if the posting request is submitted within the agreed transitional period of 6 months (October 1, 2024) + 1 month (November 1, 2024) from the date of entry into force of the Agreement itself. For posting requests submitted after this deadline, the exemption is recognized from the date of submission of the request.
Conclusions
This new agreement represents an important step forward in simplifying and harmonizing social security regulations between Italy and Japan, providing greater clarity and legal certainty for workers operating in both countries. It is expected that the entry into force will reduce the burden on businesses and employees and further promote economic and interpersonal exchanges between Japan and the Italian Republic.