Global Insight Tax and International Assignments: an overview There are many issues to consider when sending an employee to work overseas, including ways to reduce costs and minimise risks. This Global Insight provides a high-level overview of the key expatriate tax, payroll and HR related issues to consider at the different stages of the assignment.

We suggest there are five key tax-related questions to consider with any international assignment:

• Where will income tax be due?• Where should employer and employee social security tax be paid?• What employer payroll and reporting obligations are there?• What is the assignment policy and terms?• How much will the assignment cost?

We consider each of these during the main phases of the assignment:

Pre-assignment On-assignment Repatriation

• Agree assignment policy and terms

• Budget and forecast assignment costs

• Employee and employer tax planning

• Employer payroll set-up • Apply for exemption from

social security taxes in assignment location

• Employee tax briefings

• Employee support: tax registration and tax returns

• Employer compliance obligations

- payroll - benefit expenses reporting

- share reporting• Policy administration,

e.g. “tax equalisation”

• Employee tax deregistration

• Post-assignment compliance and tracking issues:

- employee tax returns - employer trailing obligations: (payroll; benefit/expenses and share reporting)

- Projection of post assignment tax costs

www.blickrothenberg.com/expat

Pre-assignment

Tax planning• Can you structure the assignment tax efficiently to

reduce costs? • Can the employee structure their personal affairs to

reduce tax? E.g. set-up offshore bank accounts• Is it possible to apply for an exemption from social

security tax in the assignment location?• Can you apply to reduce or stop payroll withholding in

the home or assignment location to improve cash flow?Assignment policy and terms• What are the assignment terms and conditions? Do you

have an assignment policy? • What assignment allowances do you pay? What are

the differences in costs between the UK and home location?

• Who will be responsible for UK tax? Who pays the overseas tax on assignment benefits? Will the assignee be better or worse off, or in a neutral position?

Budgets and assignment costs• Prepare cost projections to show how much the

assignment will cost• Prepare an assignment budget to avoid surprises• Calculate how much the assignment taxes will be• Model the costs of different assignment packages Compliance obligations• Does the company have to withhold tax in the

assignment location? • If yes, how do you set-up and operate an expat payroll

in the assignment location? • Are there other employer compliance obligations to

consider for expats such as reporting of share income and employee benefit/expenses?

• Will you provide the employee with a tax briefing with a tax professional so that relevant tax forms can be prepared, help the employee understand their tax obligations and be tax compliant in the home and assignment location?

Other considerations• Corporate tax issues (e.g. creating a permanent

establishment and transfer pricing considerations)• Immigration compliance• Employment law obligations in the assignment location• Shipping and moving • School selection• Finding accommodation• Banking service• Agreeing assignment benefits

On-assignment Employee tax compliance• On-going employee support (tax and HR)• Tax registration• Home country tax returns (claim foreign tax credits/

expat reliefs)• Tax returns in assignment country• Estimated tax payments• Other compliance obligations, e.g. foreign bank

account reporting Employer tax compliance• On-going employer tax support at home and in the

assignment location• Satisfy on-going payroll obligations• Benefit and expense reporting obligations • Share reporting obligations • Help administer policy and answer questions

(e.g. relating to tax equalisation)

Repatriation

• Employer and employee repatriation tax planning• Employee tax briefings and tax deregistration• Payroll adjustments at home and the

assignment location• Post-assignment employee tax compliance,

e.g. tax returns• Post-assignment employer tax compliance, e.g. payroll,

benefit / expenses reporting and share reporting • Forecast post assignment and closing costs

www.blickrothenberg.com/expat

©October 2016. Blick Rothenberg Limited. All rights reserved. While we have taken every care to ensure that the information in this publication is correct, it has been prepared for general information purposes only for clients and contacts of Blick Rothenberg and is not intended to amount to advice on which you should rely. Blick Rothenberg Audit LLP is authorised and regulated by the Financial Conduct Authority to carry on investment business and consumer credit related activity.

For more information, please contact:

www.blickrothenberg.com

Mark AbbsPartner+44 (0)20 7544 8744mark.abbs@blickrothenberg.com

16 Great Queen StreetCovent Garden

London WC2B 5AH

+44 (0)20 7486 0111

Blick Rothenberg: Global Insight

In an increasingly globalised world, business and individuals face a wide range of tax challenges and opportunities every day. Blick Rothenberg produce a variety of thought leadership and other materials to help keep you informed of the tax issues that affect you.

Blick Rothenberg is a leading accountancy firm and supports over 800 international businesses. Our specialist Expatriate Tax Services team has considerable experience in helping organisations and individuals who work across international borders with tax and payroll compliance, tax planning and related policy issues.

Blick Rothenberg was named winner of the Best International and Expatriate Tax Team at the Taxation Awards 2015. Recognised as a mark of excellence within the sector, the awards were judged by a panel of leading professionals and officers of major tax institutions.

We have also been highly commended by the Chartered Institute of Payroll Professionals (CIPP) as being a leading firm in the provision of international payroll services.