Keeping up with regulations around global taxes, travel, and expatriate programs can be difficult, especially when juggling multiple other priorities. Our team of industry experts continually creates informative resources to help you navigate the tax landscape.
Understanding Mobility Tax Webinar Series
When managing your employees’ international assignments, it is essential to accurately determine both hypothetical and gross-up taxes so you can develop an equitable expatriate compensation package. Income tax is often one of the largest costs associated with international assignments, so it’s a critical component of your organization’s understanding of international taxation.
Our three-part on-demand webinar series walks you through these foundations:
- In Part One, you’ll learn the basics of international mobility taxes, obtain an understanding of common income, expenses, and allowances, understand what gross-ups are, and discover best practices for managing the tax costs of international assignments.
- Part Two of the series reviews typical assignment types and the taxes associated with them, introduces tax equalization and protection, presents an overview of the taxation of short-term assignees and business travelers, and gives best practices for application of tax treaties.
- In Part Three, you’ll get a better understanding of taxation when compensation is deferred, how to structure compensation in your international mobility program, and how to apply totalization agreements.
Checklist to Prepare Your International Employees for Assignment
As your employees prepare to depart for their international assignments, use this thorough checklist of items to ensure your employees are all set before they leave the country. The Outsourcing Evaluation Checklist for Your Mobility Tax Program allows you to determine whether you can handle the responsibility internally or if you need to outsource to a third party.
Your international mobility program should address all stages of the employee’s assignment:
- Initial assessment—selecting candidates; determining the pay package; creating appropriate documentation; and communicating with key stakeholders
- Assignment start-up—coordinating key services, including immigration, tax, and relocation related services; understanding company and employee compliance requirements; implementing required pre-trip planning steps; and planning for assignment costs
- During assignment—handling company payroll and compliance requirements; coordinating ongoing employee services; monitoring immigration and tax timelines; and filing for extensions as needed
- Repatriation—communicating with the employee and key stakeholders; coordinating employee repatriation services; planning for a successful transition
The checklist can help your team identify which tasks should remain in-house and which ones should be be handled by a third party.
Tax Matrix for Short-Term Business Travelers
If your company has employees who travel internationally on a short-term basis, the tax implications can vary widely from country to country. We’ve put together an easy-to-follow matrix with an example of these considerations for travelers between the US and Canada.
Questions you’ll need to take into account for all countries include:
- When is a US citizen considered a tax resident in the Host country?
- What is the minimum number of days in the Host country that could trigger reporting and withholding obligations?
- Is a tax treaty agreement in place between the Host country and the US?
- If an income tax treaty is in place, what are the criteria that need to be met to obtain an exemption from Host country tax?
Guide to Understanding the Tax Accrual Process
It can be meticulous work to navigate the different tax regulations and calendars of other countries; worldwide tax payments often occur after the year has ended, resulting in paying final taxes up to potentially a year or more after the assignment is completed. Our Tax Accrual Process Guide is designed to help your finance and accounting departments identify a method to properly budget and account for the costs relating to an international assignment.
This guide provides an example of a summary of the tax accrual process including how to account for tax equalization payments, how common expatriate reimbursements impact the employee’s taxable compensation, examples of journal entries, and more.
Assessing the Security of Your Mobility Program
Cybersecurity and data protection are key considerations for any organization, especially when dealing with employees who work internationally and share their personal information with your company through digital channels. We’ve put together a Data Privacy and Security questionnaire that can help you assess how secure your mobility program is from a data and privacy perspective.
You’ll evaluate areas such as:
- If your company has successfully completed a SOC 2 Type 2 audit within the last 12 months
- If you utilize security controls such as two-factor authentication to control access to operational systems and information
- If you have encryption methods in place for protecting data
- If you have formalized a disaster recovery and/or business continuity plan
After completing the questionnaire, you’ll receive a score that lets you know how secure your company’s data is and identifies gaps in your protection plan.
These five resources should help you craft your organization’s international mobility plan or improve upon your existing one. If you’re looking for more helpful resources like these, our Resources Center is full of newsletters, webinars, and downloadable guides on a variety of topics related to mobility programs. We also have a regularly updated blog with articles authored by our industry experts.
It’s easier to stay on top of the tax landscape if you have access to up-to-date resources. If you’re working with a world-class mobility tax services partner, their team is dedicated to keeping up with industry trends and regulations so that you are well-prepared for coordinating your employees’ international assignments.