As businesses go global, so the need arises for employees to work internationally too. While this can be exciting for both company and employee, the tax implications should always be considered.
Recent years have seen greater complexity in employment taxes, bringing increased challenges for payroll functions in global businesses. Employees working on overseas assignments bring particular complexities, not least because of the expense and the additional administration attached. Failure to comply with local and ”home” country regulatory and tax requirements can be particularly costly.
As will become evident, international tax rules are not always joined up. Tax liabilities can sometimes still arise both at home and overseas, for both company and employee. Alongside income tax, social security taxes must also be considered. Local and overseas reporting requirements can be burdensome.
Difficulties can also arise when establishing whether an individual working as a contractor is really a contractor, or should actually be treated as an employee. Getting this wrong can be costly.
The sensible approach for any expanding business is to plan ahead, consider the widest tax implications, and always take expert tax advice. Individual employees will also benefit from professional support, helping them to get the most from their overseas assignment, while also reducing the risk of costly compliance errors.
Employers' support & payroll