Blogs / Send feedback

News

	Onboarding Best Practices

	Good Guy = Bad Manager :: Bad Guy = Good Manager. Is it a Myth?

	Five Interview Tips for Winning Your First $100K+ Job

	Base Pay Increases Remain Steady in 2007, Mercer Survey Finds

	Online Overload: The Perfect Candidates Are Out There - If You Can Find Them

	Cartus Global Survey Shows Trend to Shorter-Term International Relocation Assignments

	New Survey Indicates Majority Plan to Postpone Retirement

	What do You Mean My Company’s A Stepping Stone?

	Rewards, Vacation and Perks Are Passé; Canadians Care Most About Cash

	Do’s and Don’ts of Offshoring

Error: No such template "/hrDesign/network_profileHeader"!

Blogs / Send feedback

Help us to understand what's happening? Reason

More information

Security Code

Key Mistakes Made When Administering an International Assignment Program Created by

Carol Rutlen

Content

This is an excerpt from On the Edge, a monthly newsletter from EE that answers your questions regarding international assignments. This month we begin a two part series addressing the following:

 <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" ?>


<ul style=" margin-top: 0in;" type="disc">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">What are the key mistakes made when administering an international assignment program?</li>
</ul>

 

The list, certainly not comprehensive, is meant to provide you with a quick checklist of the basic mistakes made by international assignment program administrators. Hopefully, the list will help you fine-tune your existing program. So, with that caveat, let´s get started!

 

<ol style=" margin-top: 0in;" type="1">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">No written tax equalization policy for international assignments.</li>
</ol>

Why have a written tax equalization policy? 

<div style=" margin-top: 0in;" type="1">
<ul style=" margin-top: 0in;" type="disc">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Enhances assignee mobility and satisfaction;</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Protects assignee cash flow;</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Minimizes special negotiations;</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Helps make international assignments tax neutral;</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Controls assignment costs; and</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Limits the risk of tax non-compliance.</li>
</ul>
</div>

 

<ol style=" margin-top: 0in;" start="2" type="1">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">No written compensation policy for international assignments.</li>
</ol>

Why have a written compensation policy? 

- Ensures the assignee´s purchasing power in the host location;

- Provides tax-effective delivery of base compensation and assignment allowances;

- Controls assignment costs;

- Ensures consistency; and

- Improves assignee perception as to the fairness of the program.

 

<ol style=" margin-top: 0in;" start="3" type="1">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Failure to Follow Policy</li>
</ol>

Why should the tax equalization and compensation policies be followed?

<div style=" margin-top: 0in;" start="3" type="1">
<ul style=" margin-top: 0in;" type="disc">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Lowers assignment costs;</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Eliminates special deals;</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Increases assignee satisfaction; and</li>

<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Conforms to corporate strategy.</li>
</ul>
</div>

 

<ol style=" margin-top: 0in;" start="4" type="1">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Poor coordination/interaction with the payroll department</li>
</ol>

Why should HR interact with payroll?

- Produces seamless payroll delivery - especially assignment allowances;

- Reports tax costs on all assignee remuneration accurately and timely - both in home and host country;

- Eliminates costly redo efforts;

- Correctly records transactions for accounting and payroll; and

- Facilitates compliance with host country payroll reporting requirements. 

 

<ol style=" margin-top: 0in;" start="5" type="1">
<li class="msonormal" style=" margin-bottom: 0pt; margin-top: 0in; margin-left: 0in; margin-right: 0in;">Inadequate oversight on hypothetical withholdings and advances</li>
</ol>

Why should one department be responsible for the management of hypothetical withholdings and advances?

- Provides a centralized reporting point for international assignee compensation;

- Supplies direction as to what needs to be hypothetically withheld during the year;

- Increases internal control of tax advances to, and tax payments on behalf of the assignees; and

- Increases assignee confidence in the tax equalization system.

 

Next month we´ll finish our list of mistakes made when administering international assignment programs.

Tags

News