When employees relocate across borders, whether internationally or within the US, they can face major tax complexities. A move from a low-tax location to a high-tax location, for example, can significantly increase their tax liability. Beyond this, they may face challenges related to the sale or rental of a home, moving expenses for state reporting purposes, residency issues, and a range of other tax considerations they may not be prepared to handle on their own.
A mobility tax services firm applies domestic and international tax laws and treaties to help companies and their mobile employees meet global tax reporting and payment obligations while managing tax risks and costs. These firms guide both companies and individuals through the tax complexities that arise when employees work outside their Home location.
Mobility tax services firms support their clients by helping to structure cross-border employment scenarios in a manner that meets employer and employee objectives, while also assisting with tax and payroll compliance in both Home and Host locations. In addition, they provide employers with guidance on developing policies and procedures that fit their workforce, along with education and support to help avoid unexpected tax assessments, penalties, and interest.
Company-level services could include assignment planning and compensation structuring, tax cost projections, global equity consulting, and business traveler and remote worker compliance. On an individual level, firms often provide Home and Host country tax counseling sessions, tax return preparation, and calculations needed to apply company tax reimbursement policies, such as tax equalization.
Even companies with large internal tax departments struggle to keep up with the constantly changing tax laws and regulations affecting mobile employees in both their Home and Host locations. To bridge this gap, they turn to mobility tax services firms for additional expertise and guidance.
Because of this, firms specializing in mobility taxes maintain overseas offices or affiliates in countries and territories that are active in the global economy. This international presence allows them to assess complex mobility tax issues holistically, considering the tax rules of every jurisdiction involved in a given assignment.
By staying current on evolving requirements and leveraging established partnerships with local tax firms, mobility tax specialists help companies and their mobile employees remain compliant in Host locations while continuing to meet tax and reporting obligations in their Home countries.
Mobility tax services firms rely on their network of international cooperating offices and affiliates to prepare local tax returns for mobile employees. Mobility tax advisers understand the nuances of each country’s tax laws and know the right questions to ask, helping ensure that employees’ tax matters are handled accurately and efficiently.
These close partnerships with local experts also help to ensure companies don’t adopt a “one-size-fits-all” approach. Two mobile employees in the same Host location may face very different tax situations depending on their Home country citizenship or residency. By working with trusted local advisers, mobility tax specialists provide guidance tailored to each employee’s unique situation in both the Home and Host locations.
When a company relocates employees overseas, navigating the tax implications can be a complex and daunting task. A mobility tax services firm provides the guidance and support needed to meet global tax reporting and payment obligations while proactively managing tax risks and costs.
With the right provider, companies can structure cross-border employment arrangements more efficiently, reduce the likelihood of unexpected tax liabilities, and maintain compliance for both the organization and its mobile employees.
If your company is considering an assignment or transfer program, now is the time to explore how a mobility tax services firm can help. Schedule a free consultation and take the first step towards simplifying mobility tax compliance and protecting your employees from unexpected tax challenges.