United Tax Network
United Tax Network St. is an international network consisting of 5,000 + professionals in over 110 countries delivering multidisciplinary tax, legal and advisory services in the field of global mobility. Throughout this vast network, we provide services under our core values: We Listen, We Commit, We Act.
Structuring the services of an expat depends on the circumstances and are generally categorized as a direct foreign posting, secondment, temporary transfer/localized, or dual-/co-/joint-employment.
Direct foreign posting. The expat remains employed by the home country employer but the place of employment shifts to the host country. The expat renders services directly for the home country employer.
Secondment. In case of a secondment, the expat remains employed by the home country employer. However, the expat moves abroad and renders services for the host country employer.
Temporary transferee/localized. The employee moves abroad and is hired by the entity in the host country. In principle, the employee temporarily resigns from the home country employer and is simultaneously hired by the host country employer. A side letter often addresses the post assignment repatriation to the home country.
Dual/co/joint employee. The expat in such a case works simultaneously for both the entity in the home country and for the entity in the host country. This is also regarded as a salary split.
Analysis of the financial situation, applicable income tax treaties and expatriate tax regimes to achieve the lowest taxes possible. This helps the company to manage the overall costs of the expatriate while conforming to the obligations and requirements of the applicable tax laws. Costs projections, hypothetical tax calculations and tax efficient reimbursement of secondment costs.
Design and implementation of secondment policies with the objectives to provide clear advice, support and guidance to managers and employees regarding their roles in managing the secondment process and the management of processes related to such secondments. To provide a cost effective, fair, and equitable method of providing employees with work experience and development opportunities.
Analysis of the social security position, applicable treaties, and totalization agreement to achieve the best position for the employee, considering the overall social security costs for the employer. This also includes State old age and other social security related benefits and obligations.
Preparation and timely submitting of the accurate individual income tax returns for (expat) employees. Coordination of income tax returns in both home and host country. Follow up tax equalization calculations for final tax settlement between expats and the employer. Instructions on accurate and in time payments of income, wage, and social security taxes.
In case of a secondment, the host company may be subject to corporate income tax in the host country as permanent establishment. This is determined based on the applicable tax treaty and local corporate income tax law.
A permanent establishment is a business premises in the host country that is equipped with sufficient facilities to operate as an independent business. A permanent establishment includes for example a store or other permanent sales outlet, a workshop, or a factory with offices.
An individual (other than an agent) who is acting in the host country on behalf of the home country and has, and habitually exercises, the authority to conclude contracts in the name of the home country constitutes a permanent establishment by means of a permanent representative.
Drafting of assignment letters, employment agreements, letters of intent, side letters. Advice on and drafting of settlement and confidentiality agreement. Determination of possible issues regarding international employment law and applicable local labor regulations.
Analysis of income tax treaty provisions, including tax planning opportunities. Advice on local compliance regulations, including processing for tax payments. Advice on multi-national taxation of equity remuneration and avoidance of double taxation.