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Discover the Sticky Tax Implications of Mobile Workforces
In the popular series 'Where in the World Is Carmen Sandiego?' Carmen is an international thief who sneaks around the world dodging the crime-fighting moves of her followers while leaving behind fundamental lessons of math, geography and other subjects in her wake. Unfortunately, when your colleagues and employees travel around the world advancing the objectives of your company, what they may bring back is a bag of tax and legal risks that may result in unexpected tax and criminal liabilities for themselves and the company. Taxand US presents some key tax considerations for companies with mobile workforces, focusing on the general income tax considerations of an entity doing business outside its home country.
Companies are investing and doing business in foreign countries to expand their operations and/or capture new target markets in growing economies. Therefore, with a mobile workforce and globalisation at its best, it is sometimes difficult to know what countries the company's employees are traveling to, and what are the related tax consequences of their deployment. Meanwhile, tax administrations continue to operate and manage their tax revenues on a national, jurisdictional or territorial basis. This dichotomy presents a challenge to companies that need to manage the tax, legal and immigration exposure of their mobile workforce, while meeting the global demand for their services and products
Tax authorities around the globe are paying more attention to the type of work and projects that companies are carrying out in their jurisdictions, and are consequently specifically examining those inbound activities in the pursuit of the collection of additional tax revenue. Multiple countries are performing joint examinations, cooperating and sharing any relevant information, in order to assess the local tax exposure and obligations the incoming company may have. As a result, if your company currently has or is planning to have operations in a foreign country, you should take immediate action by reviewing the current and prospective foreign activities, as well as by establishing processes with the intention of mitigating, preventing or minimising any trade or business or PE risks and costs.
Your Taxand contact for further queries is:
Juan Carlos Ferrucho
T. +1 305 704 6670