In the new global economy many employers, even smaller companies, are facing the need to have US citizens move either temporarily or permanently overseas. Many employers find out too late that they have made critical mistakes by not thinking through the various financial and tax issues that both the employer and employee will be faced with.
As an employer you will be faced with several obstacles that need to be addressed. These issues will be critical for employee retention as the decisions you make will directly affect their pockets. In addition to the obvious logistical issues and costs of setting up foreign operations, there are numerous tax issues that will need to be considered for the employee. Our firm will work with each Company to develop a plan that meets their specific needs.
By understanding the issues surrounding overseas relocation and by creating a consistent policy for all employees, you will have a much better chance of retaining such employees and thus reduce costs in the long term. The employer must be aware that cost of sending an employee overseas can be prohibitively expensive. The compensation package of an expatriate needs to include various special provisions that can make the total compensation package much higher than a typical US employee. It is very important that you project these costs so that you know what the actual cost of an overseas assignment is.
We can help with the following:
- Develop a clear policy for your overseas employees
- Communicate potential tax issues with your employees
- Review tax treaties and local laws
- Coordinate with tax experts overseas
- Review employment contracts to protect against potential tax problems
- Create a tax equalization program
- Project the costs of relocation and develop what if scenarios
- Prepare all US tax filings including US treasury forms for foreign bank accounts
These services can either be billed to the corporation or directly to the individual.