1

International Taxationand Compensation

Anuj SarinSruthi Sagar AnanthachariPraveen Hebbale Pankaj Bhatia

Purpose of this session is to provide a basic understanding of mobility

compliance drivers so that we can engage/leverage the relevant internal/

external stakeholders2

Agenda1. Why?…few examples

2. Integrated mobility

3. Basic tax concepts/planning opportunities

4. Compensation/payroll considerations

5. Panel discussion

6. Q & A

3

Why it is important…..few examples

• Assessment to Company in Singapore for traveler on business trip who exceeded 60 days (immigration sharing information)

• US/ Canada notice to Company to produce proof of paying tax while granting/renewing visas

• Suspension from doing business in Australia for business traveler visa and tax noncompliance

• Severe penalties in UK payroll audit for not withholding on business travelers

• Auditor request for all business travelers to Japan during year

• Employee stopped at airport from leaving country for not paying taxes in Malaysia

• India PF authorities seeking information from FRRO

4

Increased linkage b/w Tax & Immigration authorities-high financial/business impact

Key functions impacting Mobility

Employee tax & social security

Compensation/ Payroll

ImmigrationCorp tax (Permanent Establishment (PE) &

Transfer Pricing)INTEGRATEDMOBILITY

HR/Finance/Legal

Significant linkage between different functions

Basic tax concepts

• Taxability varies from country to country & employees may be taxable from day 1

• Even employees on business visa may become taxable in host location

• Even though employee may not be taxable the host social security may still be payable

• State/local taxes• Withholding obligations

6No one size fits all approach

Basic tax planning opportunities

• Tax Treaties– De-minims rules– Charge of costs

• Domestic tax regulations– Breaking of residency– US-Away from home regulations– Allowance vs. Reimbursement– Foreign Tax Credit (FTC)

• Social security/totalization agreements

7Opportunities to reduce costs

Compensation/Payroll

• Assignment type/duration• Minimum salary requirements/

Labour law compliance• Benefits• Industry benchmark• Actual/ shadow payroll• Split pay• Imputed items• Tax equalization• Reimbursement of expenses?• Documentation is key

8Legal/fiscal compliant compensation process with robust documentation

Final thoughts

• No ―”one fits for all” approach • Create a cross functional team• Identifying the owner…clear

definition of roles and responsibilities• Robust mobility technology tool• Proactively identify all costs

(including hidden costs)• Ongoing education• Be there…..EVERYTIME

9Teamwork, ownership & accountability