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3 Key Steps to Effective Global Tax Planning through Transfer Pricing

As businesses look to capitalize on international opportunities and establish a global presence, the question of how to optimize tax planning across multiple jurisdictions becomes paramount.

If we look back to our article that provided three key steps for global expansion success, we shared the actions required to best administer and support a globally mobile workforce. These steps ensure effective tax planning for individuals critical to the global success of the company. A happy, growing workforce begets a healthy culture and a successful business. And companies growing globally also want to ensure happy, growing earnings. So, once the mobile workforce planning is in place, the next critical question arises: How do I ensure effective tax planning for my global business?

Tips for a Post-Tax Season Review of your Mobility Program

Now that the intensity of another US tax busy season has passed, it’s an opportune time to reflect on your mobility program with a post-tax season check-up. Taking time now to review this past busy season will allow you and your mobility tax provider to discover ways to enhance the employee experience, highlight areas of risk and outline necessary actions, and understand any frustrations that occurred so you can strategize future improvements. To guide you through this review, we’ve created a checklist that includes key considerations and tips for a successful post-tax season review. 

Tips on Navigating the Tax Accrual Process

Sending business travelers on tax-equalized assignments around the globe often makes good business sense, but how to account for the tax costs associated with assignments can be challenging. To ensure incremental tax obligations don’t take you by surprise, it helps to have a process in place so you’ll be prepared for the additional expenses your mobile workers trigger along the way. To do this, many companies implement an accrual solution.

Tips for Hiring an International Tax Services Provider

It is not uncommon for businesses expanding their operations across international borders to discover that moving employees abroad has created tax issues—and unfortunately, they often don’t discover this until they receive notice that overseas employees are noncompliant in either their Home or Host country. 

How Can I Avoid Double Tax While Working Abroad?

When they are working outside the United States, most US citizens and permanent residents (i.e., green card holders) will be required to file income tax returns in both their Host country and in the United States. Filing two sets of returns can be a headache for the taxpayer, but it does not necessarily mean that they will be taxed twice on the income earned while working abroad.

Are US Citizens and Green Card Holders Still Subject to Taxes in the US when Living Overseas?

If you have employees working outside the United States who are US citizens or permanent residents (i.e., a green card holder), these individuals will need to continue filing US tax returns to declare all of the income they earn in both the United States and their Host country. This requirement does not change if they are employed or paid from a non-US employer. Additionally, most of the tax rules that apply to taxpayers living in the United States will also apply to US persons operating overseas. The result may be that an overseas employee will be subject to tax in both the US and other jurisdictions.