Virtually all companies with a mobile workforce require technology to assist in managing their mobility program. This technology often includes features such as dashboards that allow you to monitor an employee’s tax information in near-real time, portals that enable your taxpayers to upload tax documents, and/or tracking capabilities that assist in monitoring mobile employees’ locations. But just having up-to-date access to this information is rarely a complete solution to the tax compliance issues that often accompany a mobile workforce.
Why technology is important to your mobility program
The technology used to track the tax compliance of a company's mobile employees can confuse even the most experienced mobility professionals who are often unsure of what to do with all of the data it provides. However, with the support of an experienced mobility tax professional, this data can provide your company with useful guidance when managing your mobility program.
One of the most basic mobility tax technology functions is simply helping your business keep tabs on its mobile employees. Knowing where your employees are located and how long they have been in a certain location will help identify compliance issues. The use of technology will ensure that both the company and employee are complying with the location’s payroll reporting and tax filing obligations and will help monitor whether they have been in the location long enough to have established residency for tax purposes.
In addition, mobile employee tax technology can play an even bigger role in your company's cross-border operations than simply tracking employment taxes and ensuring employee compliance. As one example, it can assist with tax planning strategies related to such issues as value-added tax (VAT) refunds for traveling employees. Many business travelers are unaware of the fact that nonresidents may seek a refund of any VAT paid while traveling in the European Union.
A good mobility tax firm will also have technology tools that can support other planning and compliance needs for your business. For example, if your cross-border employees have equity income, tools to assist in identifying the global tax reporting and withholding obligations may be important. If you have business travelers, technology that can proactively identify risks and compliance requirements in advance of your employee’s actual travel, may allow for better management of company costs and administrative requirements.
In the end, your mobility tax provider should be in position to help you solve problems with support from appropriate technology, rather than selling technology that may not come with an implementation plan that works for your organization.
Evaluate what information is necessary to your mobility program
A major issue with the "technology as a solution" approach taken by many mobility tax services firms is the high price tag on their technology solutions. Like the options in your own personal software or on your smartphone, these solutions often have features your company may not ever need or use. The price of these expensive, unused add-ons can be costly for your program, causing you to reduce spend in other areas or forcing you to run a program that is more expensive than it needs to be.
Many mobility tax service providers attempt to lure in new clients by offering slick technology solutions to reduce or replace the guidance of a mobility tax professional. Technology provides extensive and interesting data, but if you are left to decipher what it is saying, the data is not meaningful or useful for you or your company. You still need someone to interpret that data to provide understandable, actionable recommendations. Make sure your company is not just replacing mobility tax solutions with a slick product that provides a ton of data, but with no explanation of what it means or assistance in using it properly.
What to look for in a mobility tax services provider
The mobility tax services firm your company hires should operate as part of your team and provide the services and technology your company needs—and will use—to monitor your mobile workforce’s tax compliance needs. They should be able to use and interpret the data generated by the technology to help your company assess current risks, find gaps in your compliance program and mobility policies, and foresee future trends—and then use that information to help you build and maintain a successful mobility program.
Your partnership with a mobility tax services provider should give you and your team time to focus on more important issues such as the well-being of your mobile employees and the overall success of your program. If you find you are spending too much time analyzing data without getting true results, it may be time to evaluate your mobility tax provider.
Work with a mobility tax services provider that works as an extension of your mobility team; one who is willing to integrate with your other strategic vendors such as your relocation management company, payroll provider, and immigration firm. These close relationships ensure that your company receives actionable guidance based on all business considerations and who does more than just provide raw data that still requires interpretation.
The technology solution adopted by your company should not replace simple human interaction. Whenever you send an employee on a business trip or an assignment to a new location, they will likely have a number of questions. Make sure your mobility tax services provider offers you experienced tax professionals who have a deep understanding of the tax systems of the employees' Home and Host locations and who are available to discuss any questions that come up. A technology solution is definitely a necessary and useful tool. But it still hasn't taken the place of conversations with knowledgeable humans who understand your company’s and your employees' specific situations.
Mobility tax services firm and technology working together for you
To summarize, the data provided by your mobility technology solution can obviously be very useful, but it can also be very confusing; the data alone rarely offers the answers your company needs to run a successful and compliant mobility program. You hired a mobility tax services firm so you wouldn’t need to decipher the information provided by the technology. Your provider should act as a partner who helps you understand your tax data and who provides clear, actionable guidance based on that information.
The firm your company works with should do more than help you react to the tax issues currently facing your mobile workforce. They should provide your company with proactive advice for the mobile tax intricacies you and your mobile employees encounter. You need a team that will guide you through each of the challenges you are facing, who take the time to explain those issues, and provide you with a detailed and actionable approach for the next steps.
If you think it might be time to find your company a new mobility tax services provider—one that is responsive to your questions and concerns and offers solutions addressing the specific needs of your company—take look at our eBook The Definitive Guide to Evaluating Mobility Tax Providers.
