The payment of tax on behalf of an individual is, normally seen as a benefit in kind itself which adds to the taxable part of salary.Therefore, an additional liability to tax arises on the amount of tax paid by the employer and so on.
The payment of tax on behalf of an individual is, normally seen as a benefit in kind itself which adds to the taxable part of salary.Therefore, an additional liability to tax arises on the amount of tax paid by the employer and so on.Tags: About Love EssayDescriptive Essay Lost In The ForestTeacher'S Assistant Cover LetterBusiness Plan For EntrepreneursEssay About Groundhog Day MovieCritical Thinking Articles And Questions100 000 Words PagesUses Science EssayDuke Fuqua Essay Analysis
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These figures do NOT include the lost business opportunity costs, the losses on human capital and morale, the family and personal distresses, and most importantly for the future of the talent pool, the dissonance that leads to radically increased attrition rates upon return.
In order to calculate final liability to host country tax to be borne by the employer it is necessary to undertake a process known as ‘grossing up’.
We will not explain this in detail, however suffice to say that the company often needs to bear a far greater level of tax to that which the individual would have paid if they had simply stayed at home or been responsible for meeting their own tax obligations in the host country.
Tax equalisation is presumably in place to encourage expatriates to work for their employers wherever they may be sent, sure in the knowledge that they are not disadvantaged tax-wise and their tax affairs are taken care of by the company’s appointed tax advisers.
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Indeed, it is very common for the employer to enlist the assistance of a firm of tax advisers to oversee the preparation of both home and host country tax affairs, and, crucially, the payment of any local tax and social security which may be due as a result of the assignment to the host country.The only ‘tax’ that the individual pays is the ‘hypothetical tax’ withheld at source to reflect home country tax and social security liabilities.Of course, if someone becomes non-resident in their home country, it is unlikely that any great liability to tax would have existed there anyway, however we must remember the aim of tax equalisation is to ensure that the individual is no better or no worse off as a result of the assignment." The IAP utilizes advanced technology and artificial intelligence to produce a detailed, prioritized list of EXACTLY what issues need to be addressed for the specific employee and family matched to the specific anticipated destination.These are precisely the issues that if not addressed, WILL impact the assignment, costing time, producing stress, and potentially leading to failure or early return.At the end of the section we present an expat employment contract checklist that you can use to assess whether the contract you are offered contains all the relevant provisions and that all elements of expat contract negotiation have been covered.Do you have a comment about this article, a further question or even a correction? We may edit your comments and cannot guarantee that all comments will be published, please be nice!These issues ARE the leading cause of assignment failures, compromises, and inefficiencies.Using the IAP in a well designed planning and preparation program (we can help you implement this) assists the family in managing these issues We'll provide you with a FREE detailed spreadsheet that will allow you to use YOUR stats, YOUR estimates, and YOUR data to calculate YOUR return on investment for using the IAP in a comprehensive preparation program!The document will form the very basis of your rights and responsibilities and it is therefore important that you get it right.This section provides detailed information about the key components of expat contract negotiation and provides useful tips for ensuring that you negotiate a contract that will adequately meet your needs.