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The Expatriate Administrator

The Expatriate Administrator, published by KPMG's Global Mobility Services practice, offers thought-provoking articles that can help raise awareness about topical and timely issues affecting international assignment programs and globally-mobile employees working for multinational organizations.

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New Article posted on September 27, 2017 - Taxes and health-care reform: Now what?


Taxes and health-care reform: Now what?
Efforts in Congress to repeal and replace the Affordable Care Act (the ACA) have continued this year. While health-care reform developments occur almost daily (and sometimes more often), to date no legislation has been enacted. All health-care industry participants continue to advocate for their respective positions at the same time the legislative agenda surrounding health-care reform continues to evolve. This article, by Lori Robbins and Monica Coakley with KPMG’s Washington National Tax practice in the United States, summarizes the health-care reform “state of the union” from a tax perspective and discusses the implications of future health-care reform possibilities on the ACA’s tax provisions.
With Employees on Assignment, Determining Who Is the Employer Is Not Always Easy to Figure Out
In the context of global mobility, there is often confusion around the tax treatment of employees sent to a foreign country for work. For a global mobility tax adviser, it’s not unusual to hear the following question: “Will my employee’s work-days in the other country be taxable there?” This question is often followed by others, largely revolving around who is the employer and does the assignment country follow the “formal employer” or the “economic employer” approach. In this article, KPMG’s Maikel Wijsbek examines these questions and discusses the many aspects of “economic employer” as well as to what extent an exemption under Article 15 of a taxation treaty might be granted so that an employee might not be subject to host country taxation.
Budgeting for an Assignment? Look out for Those “Goodbye” Taxes
Departure taxes, sometimes known as “exit” taxes, are too frequently an “after-thought” for employees taking an international assignment. It is important to properly prepare an employee on international assignment for his tax obligations and potential liabilities when he leaves the host country, otherwise that employee, and very likely his company, could be exposed to a higher-than-expected tax bill and experience some frustration and anxiety. This article highlights the fairly complex subject of “departure tax” and looks at some popular assignment countries that impose them.
Germany Takes Steps to Enable Intra-Company Transfers with Many Changes in Store
This article addresses the impending German law and the EU’s Intra-Corporate Transfer Directive that will reduce barriers to Germany’s ability to facilitate intra-EU mobility both for EU/EEA workers and non-EU/EEA workers.
Tax reform is on the agenda: What it may mean for international assignees
Under the new administration, there are several ideas and plans under discussion that touch upon individual taxation. While there is still much uncertainty, this article examines the two major tax plans currently being discussed that may affect individuals and the potential impact on international assignees and their employers.
FBAR Reporting: Changes are in the wind
The due date for filing FBARs is fast approaching: June 30, 2016! Are your assignees who are impacted by the rules prepared to timely file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the “FBAR”)? In particular, where globally mobile individuals are concerned, understanding who the rules apply to–A U.S. employee overseas? An individual who claims to be a U.S. non-resident pursuant to the tie-breaker provision of an income tax treaty? Dependent children with interests in foreign financial accounts? – and what type of accounts they apply to, is critical, as the individuals concerned must gather the appropriate information and documentation, and/or work with their tax service provider, to make a timely filing. Because non-compliance can result in financial penalties and possible reputational risk to their employers, they need to determine whether they have a filing obligation. This article alerts taxpayers to the upcoming filing deadline for calendar year 2015 FBAR reports and focuses on the current limited exceptions to the annual filing requirements. It also discusses possible relief from penalties for previous failures to file and reporting changes being proposed for future FBAR filings.
What's Your Company's Plan When it Comes to Globally Mobile Employees with Equity Awards?
With business travelers and mobile executives more prevalent than ever before, and U.S. and foreign tax authorities ramping up oversight and revenue-raising efforts, employers are actively seeking ways to meet their equity tax compliance obligations while keeping their costs down and risks mitigated. A well-designed plan that considers a ‘holistic’ approach to tax reporting and withholding requirements, from local to state/provincial to federal/national requirements in the home jurisdiction as well as the host, can help a company to effectively achieve compliance and manage its risk associated with equity-based compensation.
It's Spring and FBAR Reporting Is in the Air
The requirement to report foreign financial accounts on FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the FBAR), has become an area of increased focus by individuals, as well as for-profit and not-for-profit entities. We have seen enhanced transparency and growing cooperation among tax authorities worldwide, as well as stepped-up IRS scrutiny and enforcement efforts aimed at unreported earnings from offshore accounts. International assignment program managers responsible for employees that include U.S. expatriates, dual citizens, and foreign nationals who gained permanent U.S. residency (green cards) and then moved back to the home country need to be aware of this enhanced scrutiny since these employees – whether working in the United States or abroad – may own or have authority over foreign financial accounts and need to report these accounts. This article alerts taxpayers to the upcoming filing deadline for calendar year 2014 FBAR reports (June 30, 2015), with a special focus on the current limited exceptions to the annual filing requirements and the possible relief from penalties for previous failures to file.
The Kik Case Helps to Navigate the Murky Waters of Applicable EU Social Security Rules for Mariners
The social security position of mariners within the European Union/European Economic Area (EU/EEA) has not been entirely clear. Particularly for mariners in the EU, previous legislation and former case law did not provide much certainty for those in situations where non-European Economic Area (EEA) factors, such as the employer, flag of the vessel, country, nationality, and/or working area, are present. The ambiguity had given rise to many legal cases which have differed in their outcomes and failed to provide clarity or consistency. This article examines a recent court case, known as the “Kik case,” and how it helped shed light on the difficult position of certain mariners. The article looks at the EU social security regulation and relevant case law, and describes the issues related to determining the social security position for mariners from one particular EU member state working in cross-border situations.
As Euro Tumbles Against the U.S. Dollar, Who Stands to Gain, Who Stands to Lose?
If you are managing international assignees from the U.S. (or other “strong currency” countries) who are paid in euros, your assignees may be concerned about the impact on their remuneration, disposable income, and their cost of living due to the recent decline in the euro companred with the U.S. dollar and other strong currencies. This article discusses the effect of the falling euro compared with the U.S. dollar (and other currencies, like the British pound) on assignee remuneration and disposable income, as well as on qualification for special expatriate relief programs like Ireland’s Special Assignee Relief Programme (SARP). Highlighted in the article are several factors for employers to consider and various steps they can take to help mitigate the negative effects of the fluctuation in exchange rates.
What Have the Social Security Regulations Helped to Clarify Since the Court's Windsor Decision?
This article summarizes some of the more common issues arising from the Social Security Administration’s interpretation of the Supreme Court’s ruling in Windsor v. United States. International human resources and global mobility professionals will find it important in order to obtain a basic understanding of these policies and practices and the social security issues related to same-sex couples on international assignment.
Changes in Store for Internationally Mobile Employees with Share-Based Payments
The income tax and social security (National Insurance contributions) treatment of employment-related securities income has long been recognized as very complex, often with no clear, conclusive direction in the United Kingdom as to how to properly tax such income in cross-border situations. This can place employers of such cross-border workers in a difficult position. The complexity and challenges have been recognized by the U.K. tax authorities, which, following a lengthy consultation and upon recommendations by the Office of Tax Simplification, has put forward proposals to help bring clarity and equity to this area of taxation. This article aims to shed light on how the rules are currently applied, what the proposed rules will change, and what the potential impact may be on employers with internationally-mobile employees working in the U.K. who will be receiving employment-related securities income after April 2015, as well as the impact on the employees themselves.
The Impact of the Affordable Care Act on International Assignees and Their Health Care Plans
The 2010 Patient Protection and Affordable Care Act (also referred to as the "Affordable Care Act"), along with the associated regulations and guidance thus far, have introduced complex health care coverage rules and requirements in the United States. Health care providers, including employers, are grappling with how to effectively implement and comply with the various rules. In the international assignment context, employers may not realize that the requirement to offer certain health care coverage (the employer shared responsibility requirement), as well as the requirement for individuals to obtain coverage (the individual shared responsibility requirement), can apply to foreign nationals in the United States and U.S. assignees working overseas. This article offers a helpful question and answer format to help you better understand the issues at hand.
Have Undisclosed Foreign Assets? IRS Offers Options
Individuals subject to U.S. tax law who have been on international assignment and those that have lived and/or invested overseas or moved their money offshore can sometimes overlook the tax and information reporting obligations related to their foreign assets (e.g., certain foreign financial accounts and investments). There is some good news! The U.S. Internal Revenue Service recently announced new procedures for individuals who have inadvertently failed to report income related to foreign assets to come forward, cure tax and information reporting failures, and in many cases, do so without the imposition of penalties. A careful analysis, however, of the available options being offered by the IRS is a critical first step for taxpayers trying to come into compliance while hoping to reduce or avoid potential penalties.
Inbound Expatriate Employees Coming to Work in South Africa? What You Need to Know Before They Go
New South African immigration regulations were published on May 26, 2014 and global mobility professionals, as well as inbound expatriates, need to become familiar with the changed rules and processes. In addition to terminology and substantive process changes, there are also new requirements and rules on most work permit types. Failure to comply with the new regulations can result in penalties and sanction as well as other unwanted consequences. Read more for an explanation and assessment of the new rules and procedures under the immigration regulations in South Africa.
FBAR Revisited: Gone Electric
This article alerts taxpayers to the upcoming filing deadline for calendar year 2013 FBAR reports, and provides updates with a special focus on the new electronic filing requirements.
Taking a Fresh Look at the Latest Immigration-Related Changes from China: Foreign Nationals Face Tighter Regulations
It was merely a matter of time before the Chinese authorities acknowledged and acted upon gaps and deficiencies in the rules and practices in respect of foreign nationals entering and leaving the People's Republic of China. Some new rules, recently introduced in China, focus on standardizing the management of foreign nationals' cross-border movements into and out of China in order to curb illegal entries, illegal stays, and illegal employment. HR professionals should review and adjust their existing visa application procedures and "cycles" in response to the extra administration and prolonged processing time related to visas, so that the negative impact on the travel and work schedules of their employees can be mitigated.
Updated! Supreme Court’s Same‑Sex Marriage Decisions Clarify Some Issues, Cloud Others
In the United States, same-sex married couples recently won federal recognition of their rights and privileges by virtue of a recent Supreme Court decision. That Supreme Court decision, how the federal government is reacting to it, and the significance thereof for employers and their globally-mobile gay and lesbian employees, are examined in this article.
The Marketplace Challenges and Opportunities Presented by the Globalization of Higher Education
Many higher education institutions are looking to take advantage of growth opportunities outside their national borders. This is due, amongst other things, to the effects of globalization, which have created many challenges as well as opportunties.