GLOBAL EMPLOYEE MOBILITY IWP MIAMI MEETING JAMES CASSIDY, CPA SENIOR TAX DIRECTOR

Transcription

1 GLOBAL EMPLOYEE MOBILITY IWP MIAMI MEETING JAMES CASSIDY, CPA SENIOR TAX DIRECTOR MAY 20, 2014

2 Agenda Managing International Assignments! Overview! Global Mobility Issues! Assignment Planning! Tax Issues! Equity Compensation Issues! Questions 2

3 Driving Your Success! Meet Financial Goals! Minimize Administration! Satisfied Employees! Satisfied Clients 3

4 Managing Risk! Minimize corporate tax costs in host country! Minimize individual tax costs in home/host country! Avoid immigration & employment tax penalties 4

5 Global Mobility Issues! Assignment Planning! Compensation Cost Budgeting! Host Country tax & labor laws 5

6 GLOBAL MOBILITY Practices are evolving as the need for mobility changes Traditional Mobility Mobility 2.0 Market Forces Changing Employment Deal Globalization Organizational complexity Demographic changes Cost pressures Transactional Focus on costs One size fits all An island within HR Strategic Focus on value creation Segmentation by assignee and assignment type Connected to human capital and business goals

7 Concerns for International Assignees! Maintain home country compensation! Maintain home country benefits! Risk of double taxation! Duplicate living costs! Family relocation/visits 7

8 HUMAN RESOURCE / FINANCE ISSUES! Attract & retain global talent! Secondment Arrangement! Localization! Global Employee Organization! Compensation Policy! Assignment Policy! Tax Reimbursement Policy 8

9 Assignment Planning! Evaluate duration of assignments Avoid corporate presence! Evaluate number of assignees Tax exemption possible! Determine work visa requirements! Determine host country employment tax exemptions/ requirements! Delivery of tax-exempt living costs! Evaluate application of income and social security (totalization) agreements 9

10 Assignment Planning, cont. Secondment Arrangement! Maintain home country employment! Maintain home country pension/benefits! Loan employee to host country employer! Minimizes risk of permanent establishment! Host country payroll may be required! Relocation allowances! Repatriation provisions! Generally for assignments > 6 months * Not allowed for perm. resident without Income Tax Treaty 10

11 Assignment Planning, cont. Localization! Terminate home country employment! Home country labor laws/severance! Local employment arrangement! Minimizes risk of permanent establishment! Host country pension/benefits! May result in reduced compensation/ administration costs! Generally for assignments > 1 year 11

12 Assignment Planning, cont. Global Employment Organization (GEO)! Employment is transferred to GEO! Terminate home country employment! Separate pension/benefits for global assignees! Provide consistent policies for global assignees! May result in better control/allocation of costs! Equitable employment law protections! Minimizes risk of permanent establishment for operating entities 12

13 Compensation Planning! Maintain home country employment/salary! Foreign employment local compensation/benefit issues! Away-from-home tax rules! Per-diem allowances! Host country housing costs! Home leave! Costs for family members! Relocation costs! Local transportation costs! Host & Home country tax reimbursements 13

14 Corporate Tax Issues! Permanent establishment issues! Reimbursement of compensation costs! Transfer pricing issues! Tax Compliance 14

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16 International Equity Issues Recharge Arrangements US tax deduction is not available on the corporate return for stock compensation given to a foreign employee or employees of a foreign subsidiary. Ensure corporate tax savings and that appropriate entity claims a tax deduction. Social Taxes Social security tax may be required Local employment taxes may be applicable. Foreign Exchange Control Many countries have foreign exchange controls on the purchase or sale of foreign currencies by residents of that country. This may also apply to securities or compensation denominated in a foreign currency due to the fact the equity is traded on a foreign exchange. Foreign companies granting equity compensation in China may be required to file a registration with the SAFE authorities. This registration process is often very long and difficult. 16

17 ISSUES TO ADDRESS Do you have mobile employees? Do you have a mobility policy or tax policy? Are you expanding into new (emerging) markets? Does your organization use mobile employees differently than when their policies were defined? Are you concerned organization is spending too much on global assignments? Are you comfortable that assignees are being treated consistently? Are you able to retain assignees after their return? Are you concerned about aligning global mobility with talent development? Are you having trouble staffing in emerging markets?

18 BDO EXPAT TAX - WHAT WE DO TAX COMPLIANCE SERVICES! US Federal Income Tax Return! US State and Local Income Tax Return! US Federal and State Filing Extensions! Foreign Tax Return! Tax Equalization, including follow-up explanation to employee! Pre-Departure/Post-Arrival Counseling! Estimated Hypothetical Tax Calculation! Preparation of Tax Cost Estimate, including tax planning! Recommendations! US Tax Projection and W-4 Completion TAX CONSULTING SERVICES! Policy review and development! Process design and improvement! Accounting for equalization, including cross charges! Compensation review reviewing data necessary for global payroll! Compliance! Foreign tax minimization! Compensation planning 18

19 QUESTIONS?? Please contact us James Cassidy Senior Tax Director, Expatriate Services (212) Sony Martinez Senior Tax Manager, Expatriate Services (212)

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