International Compensation and Taxation by Pankaj Bhatia

International Compensation and Taxation by Pankaj Bhatia

• 1.
  International Taxation andCompensation 1 Anuj Sarin Sruthi Sagar Ananthachari Praveen Hebbale Pankaj Bhatia
• 2.
  Purpose of thissession is to provide a basic understanding of mobility compliance drivers so that we can engage/leverage the relevant internal/ external stakeholders 2
• 3.
  Agenda 1. Why?…fewexamples 2. Integrated mobility 3. Basic tax concepts/planning opportunities 4. Compensation/payroll considerations 5. Panel discussion 6. Q & A 3
• 4.
  Why it isimportant…..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
• 5.
  Key functions impactingMobility HR/Finance/Legal Employee tax & social security Immigration Compensation/ Payroll Corp tax (Permanent Establishment (PE) & INTEGRATED Transfer Pricing) MOBILITY Significant linkage between different functions
• 6.
  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 6 No one size fits all approach
• 7.
  Basic tax planningopportunities • 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 7 Opportunities to reduce costs
• 8.
  Compensation/Payroll • Assignmenttype/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 8 Legal/fiscal compliant compensation process with robust documentation
• 9.
  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 9 Teamwork, ownership & accountability