You likely know by now that employees who receive equity-based compensation, and who relocate—either domestically or internationally—during the life of the award, create tax withholding and reporting obligations. Still, when it comes to equity reporting and withholding, companies do not always act to address the risk with their mobile workforce. Often this comes down to a lack of staffing, information, or technology. So how do you move from the stage of recognizing the problem to finding and implementing a solution?
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Attracting and retaining skilled workers in today’s tight labor market takes more than a competitive salary. Many companies find they can meet their employment needs and their employees’ incentive preferences by offering a portion of their compensation as equity.
Employees who work across global as well as domestic borders and have been awarded stock options and other equity compensation or will be receiving such an award while working in locations other than their Home location, can expect to experience complex tax implications. That is because not all jurisdictions treat equity income in the same manner for tax purposes.