![]() Outsourcing can reduce risk because employees are contracted with the PEO rather than the company. To manage global payroll risk, some companies use professional employment organizations (PEOs) or administrative services organizations (ASOs) to handle the daily administration as well as payroll tax and returns for team members working abroad. To mitigate complications, research local country law and continue to assess these laws periodically because they may change. However, treaties don’t necessarily cover local employment law issues, and there’s always the possibility of a new foreign government assuming power and changing the law. If the United States has a treaty with a country where the organization has employees, income tax issues may be covered. Manage risk up-front with due diligence.Remember that the definition of an employee, contractor, or consultant in the United States may differ from those in the country where the person is working remotely. Specifically limiting functions for employees or contractors can be the difference between creating a taxable presence for the company or not. ![]() A framework looks at job duties for personnel abroad and helps align them with how the activities are viewed locally. Obtain a complete understanding of how all cross-border employees are compensated and what duties they perform. Some countries view contractors as employees, which may inadvertently create a tax presence for the company in those foreign jurisdictions. This is a significant distinction because, as noted above, having employees in countries apart from the location of the employer can establish a taxable presence for the employer in that location. Understand the Country’s Employee Versus Contractor DistinctionsĪ common tax question is whether a company has employees, contractors, or consultants. When a large number of employees work in a particular jurisdiction, determine if an offshore employee holding company could avoid taxable income in a jurisdiction.Ģ.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |