Key Takeaways
- Global mobility programs require integrated tax, immigration, payroll, human resources (HR) and duty of care support to manage cross-border compliance, risk and employee well-being.
- Early global mobility tax planning addresses permanent establishment, transfer pricing and global minimum tax risks while supporting remote work and international assignments.
- Employee mobility strategies include equity compensation, foreign account reporting and relocation tax guidance to reduce compliance risk and support global workforce planning.
Today’s global workforce environment requires organizations to address a broad range of mobility considerations that extend far beyond tax compliance. Despite world economic and geo-political uncertainty, companies are increasingly looking to send employees to work and hire talent from different parts of the world, whether on a short-term or long-term basis.
This is the first in a series of articles exploring key global mobility considerations for employers. We begin by looking at why successful mobility programs require coordinated tax, immigration, payroll, HR and duty of care support to manage risk and support employees working internationally.
Employees increasingly work across borders. This can be through:
- International assignments
- Business travel
- Remote work arrangements
- Permanent relocations
Employers face growing responsibilities related to compliance and employee well-being.
The rise of artificial intelligence is another factor that is reshaping global mobility. Not only does AI enable cross-border work, but also changes who moves, why they move and the risks associated with those movements.
Successful global mobility requires relationship-centered strategic support, not merely human resource (HR) transactional functionality. Employers demand coordination of legal, tax, immigration and HR requirements tied to international work as well as support for remote work across borders.
Address Tax Considerations Early
Early global mobility tax planning lays the foundation for successful mobility and supports risk mitigation, cost control and workforce objectives. Key considerations include:
- Permanent establishment risks
- Transfer pricing
- Indirect taxes
While the Pillar Two safe harbor provides greater certainty for U.S.-based multinational companies, global minimum tax pressures remain relevant. This is especially true for digital businesses, organizations managing remote work across borders and companies relocating operations to value-creation centers. Tax planning also helps businesses prepare for unanticipated consequences.
- What if a planned temporary relocation becomes permanent?
- Do tax strategies leave the employer prepared for unplanned cross-border remote work or business travel?
- If employer/employee relationship is not successful, does the employer have an exit strategy?
Successful Employers Consider Employee Perspective
Just as employers should work with relocation experts to address employee housing, safety and evacuation mechanisms, companies seek to protect employees from unexpected tax liabilities. This is particularly true for permanent one-way transfers.
Here are just a few considerations –
- How are you advising inbound employees with equity compensation, such as Restricted Stock Units (RSUs), stock options or global bonus plans to navigate U.S. tax requirements? Is the employee positioned to take advantage of capital gains treatment?
- Relationships can get sour. What are the taxable consequences for a U.S. national employee who decides to expatriate?
- Where does the employee bank and what fund transfers occur? Report of Foreign Bank and Financial Accounts (FBAR) and other information return penalties add up quickly and should be contemplated when considering compensation and banking logistics as part of tax planning.
While it is natural for employers to look to save costs in the relocation process, the potential financial implications of a move are sometimes surprisingly omitted from the scope of an employer’s duty of care. Global mobility professionals should be positioned to advise on this duty of care for tax and all planning considerations.
How We Can Help
PKF O’Connor Davies provides comprehensive global mobility services designed to support organizations throughout the employee mobility lifecycle. By integrating tax, immigration, payroll, employment tax and social security, global workforce strategy and duty of care considerations, we help organizations build mobility programs that are sustainable, compliant and aligned with business goals.
Our professionals help clients with the following:
- International tax planning
- Payroll compliance
- Mobility policy design
- Workforce strategy
- Risk management
A key differentiator of our practice is support provided by the extensive reach of our PKF Global network. Through our relationships with PKF member firms and trusted service providers around the world, we collaborate with professionals in more than 150 countries to deliver coordinated, high-quality mobility solutions across multiple jurisdictions. This global connectivity enables us to provide clients with seamless support for cross-border assignments, remote work arrangements, permanent transfers and international expansion initiatives.
In addition, PKF O’Connor Davies regularly works with multinational organizations to manage global mobility requests for proposal (RFPs) and coordinate service delivery across numerous countries. Whether an organization requires support in a handful of jurisdictions or across a broad global footprint, our team can assemble and manage the appropriate resources to deliver efficient, scalable and cost-effective mobility solutions.
Contact Us
If you have any questions, please contact your PKF O’Connor Davies client service team or:
Evgenia Belyavskaya
Partner
ebelyavski@pkfod.com | 646.449.6350
Leo Parmegiani, CPA, MST
Partner
lparmegiani@pkfod.com | 646.699.2848
Christoper Hall
Director
chall@pkfod.com | 914.421.5694
Gregory Kien
Supervisor
gkien@pkfod.com | 332.334.5767