When a mobile employee relocates across borders, whether internationally or domestically within the US, they soon discover that their tax situation has become far more complex as a result of the move. If that employee is moving from a low-tax location to a high-tax one, they could potentially face a major increase in tax liability. Additionally, they may also encounter tax issues related to the sale or rental of their home, moving expenses for state reporting purposes, state residency issues, and a number of other issues they may not be prepared to handle on their own.
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Globalization has transformed employee mobility, expanding it beyond the traditional short- or long-term assignments. Today, a mobile workforce encompasses a range of arrangements, including remote and hybrid work options, as well as short-term business travel. This shift has brought about greater flexibility in terms of how and where employees work, enabling organizations to tap into a wider pool of talent and operate more efficiently in a globalized world. And when employees have greater flexibility as to how and where they work, companies and employees alike must navigate complex reporting and filing requirements to avoid serious financial, legal, and reputational repercussions.
Our 10th annual Beards and Braids for Busy Season (BBFBS) campaign has begun!
Ten years ago, what began as a simple way to infuse some fun into the tax busy season has turned into an annual event to provide support for non-profit organizations around the world. To date, we have raised over $36,000 for nonprofit organizations such as AdoptAClassroom.org, Canines for Disabled Kids, Move For Hunger, and No Kid Hungry.
Pros and Cons of Different Assignment Structures for Mobility Programs
on February 23, 2023
| By Mark Tirpak
|
Global Mobility,
International Assignments,
Mobility Tax,
Long-Term Assignments,
Short-Term Assignments
As companies adjust to the new reality of work and reassess their mobility programs, there is an opportunity for them to examine the costs associated with running their mobility programs and explore innovative solutions. We are witnessing a renewed interest in mobility as companies seek to adopt the best structure for their business and employees. While non-traditional forms such as remote and hybrid work are becoming more prevalent, there is also renewed interest in both short and long-term assignments.
Ransomware, phishing, hacking, malware, botnet, viruses, spyware, worms... the list goes on. You don’t have to be an IT specialist to understand that, in our digital world, such data security threats are very real. As personal data has become an increasingly vital asset to businesses, discussions of data privacy and security have graduated from the server room to the boardroom. While both the volume and value of data processed by companies grows, so do the risks associated with that data.
Tax equalization is a policy widely used by companies with mobile employees. At its core, tax equalization is a mechanism to ensure that an employee is neither better nor worse off financially, from a tax perspective, for having accepted an international assignment. However, there are many misconceptions about what exactly it means to be “tax equalized.” As one example, some companies will try to avoid the policy because they think it will automatically lead to high company costs and administration.
