What is the purpose of bilateral totalization agreements?

• A. Bilateral agreements entered into by many countries to eliminate double taxation for individuals on international assignments.
• B. Agreements to standardize employment contracts across borders.
• C. Treaties that coordinate wage scales for multinational subsidiaries.
• D. Protocols for sharing employee medical records across borders.

Answer: (A)

Bilateral totalization agreements coordinate two countries’ social security systems so that internationally assigned workers aren’t taxed or charged for social security in both places, and so that periods of work abroad count toward benefit eligibility. In practice, this means a worker on international assignment usually pays social security in only one country, while the time worked abroad can be combined with time at home to qualify for retirement, disability, or survivor benefits. The other options describe different HR topics—contract standardization, wage-scale coordination, or sharing medical records—not how social security coverage and taxation are handled across borders.