As global tax matters continue to have a significant impact on assignment experience and costs, companies strive to develop the most advantageous tax strategies for the company and assignee. Thank you to the 50 Global Mobility Roundtable™ (GMR) community members who responded to our most recent survey on this topic. Our Consulting Services group has analyzed the results and offers the following highlights:
- It comes as no surprise that 100% of the fifty respondents to the survey work with global tax providers. And, nearly all contract with one firm globally versus regionally. Most marketplace providers offer global coverage through a variety of business models.
- Not surprisingly, the home-based balance sheet approach continues to be to predominant method for US-headquartered companies for renumeration for the traditional assignee. The approach’s advantages continue to be maintaining the link with the home country and avoiding administrative disruption to employees’ payroll history and benefits. Additional methods may include a local-based approach, particularly for much longer-term assignments or permanent relocation as well as the global market approach.
- Several respondents acknowledged using more than one approach, based on different assignment scenarios. In each case we recommend companies understand their objectives in making decisions as many variations exist and the matter is complex.
- Tax equalization continues its dominance as the policy for traditional assignments, though the “hand-raisers” may see lesser coverage. And nearly 90% of respondents provide tax preparation support. It was exciting to see the comments associated with this question as it may offer your company a new perspective on the matter of tax assistance.