Avoid these common mobility tax mistakes


Offshore Tax Advisory
Business Angel
Mentor Group
Commercial Service
Dear readers,

I have read this article and thought it has to end up in this forum for our members/visitors.

Employers are increasingly turning to mobile employees to fulfill their international staffing needs, but many companies fail to understand the complexity, costs, and compliance obligations that result from cross-border employment. The following are common mobility tax mistakes we encounter the most that are made by employers with mobile employees and tips for avoiding them.
Employers facing mobility tax issues for the first time will sometimes reach for the most inexpensive and immediate solution for their compliance needs, and fail to take steps to minimize the future tax obligations of both the employer and its employees. Often, a mobility tax specialist can help a company structure its compensation package for mobile employees to minimize the tax bite of a move overseas, especially when the employee is moving from a low-tax to a high-tax location.
Another common mistake employers make with their mobile employees is failing to properly track them to ensure they are complying with all of the requisite withholding and reporting requirements in both their Home and Host countries. Failing to do so can lead to audits, which can result in large assessments and significant fines.
Sometimes the first time an employer becomes aware that its mobile employees are not in compliance with a Host country's reporting requirements is when an individual is stopped at the border while traveling home and questioned about their business activities there. There have been instances of employees who have been temporarily detained while attempting to depart their Host country as their tax-related issues are addressed. Often, the detained employee is unaware that he or she had reporting or withholding obligations in the Host country, and the employer had not been paying close enough attention to foresee the problem.

Full read: ExpatBriefing.com | Avoid These Common Mobility Tax Mistakes


Building Trust
I would also add, watch out for departure taxes. Many Western states require for you to file "exit taxes" or departure taxes and formally tell them you left or else they still consider you a tax resident and they will chase you down decades later claiming you owe a bunch of tax even if you don't live and haven't for decades.

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