The Election Rests with the Employee, but Is the Right Choice Being Made?

Australia-based IES professionals Dan Hodgson and Ursula Dyer comment that over the past few years, the Australian government has made significant changes to the country’s tax legislation aimed at removing some of the perceived financial barriers to moving to Australia in the hope of attracting more skilled professionals to the country. Related to this, the authors note, recent statutory changes to the taxation of employee share schemes ushered in a tax regime for expatriates that is better aligned with other countries and OECD recommendations. This article examines the current statutory environment in Australia and its effect, actual and potential, in particular, on employees who enter Australia on assignment holding unvested employee shares/options.
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"Permanent Establishment" Does Not Have To Be a Scary Term

Before sending employees overseas to perform services on behalf of the company, notes Mary Kay Woods, an IES professional based in New York City, clarification should be sought concerning the potential attendant risks and obligations, financial, legal, and tax, in particular. Unwittingly, companies eager to expand into overseas markets may be creating a permanent establishment (PE). Moreover, tax authorities are heightening their scrutiny of potential PE issues. This article discusses the issues surrounding PE, and suggests what steps may be taken to mitigate the risks associated with establishing a PE.
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International Aspects and 2008 Action Steps Relative to Section 409A

The American Jobs Creation Act of 2004 added section 409A to the Internal Revenue Code significantly changing the rules for nonqualified deferred compensation (NQDC) plans. Subsequently, Treasury issued final regulations. The changes to section 409A have obliged employers to take a critical look at their deferred compensation plans. The impact has been keenly felt not only by domestic employers doing business only in the United States, but also by multinational employers with international assignment programs. With tax equalization programs, other types of tax reimbursement arrangements, and foreign plans common for many multinational employers with globally mobile employees, the new rules added more complex dimensions. Teresa Lodes, an IES professional based in Kansas City, discusses aspects of the new rules and what employers should be looking at.
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Remitting Funds into Japan Has Tax Implications and May Result in a Tax Authority Enquiry

Masami Imokawa, an IES professional in Tokyo, observes that the random auditing of the personal tax affairs of foreign nationals living and working in Japan has started to increase in the last year. The rise in individual audits is principally related to the frequency of large remittances from overseas into Japan. The audits have led to some taxpayers subsequently having to pay additional Japanese tax assessed, including penalties and interest, as a result of the remittances. Masami explains that certain individuals may have potential exposure when remitting funds into Japan and might wish to seek advice before remitting substantial amounts into the country.
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Although South Africans May Find the Grass Is Greener 'Over There', It Comes at a Price

South Africa, for several reasons, has witnessed the departure of many talented and wealthy citizens in recent years. This exodus is seen by many to be a brain drain for the country, as many people with scientific and technical skills seek greener pastures. South Africa-based IES professionals Carolyn Freeman and Deanna Comninos explain that the “cost” to an individual of emigrating is potentially very high, especially in the case of high net worth individuals. They note that emigrating individuals need to be cognizant of both the capital gains tax and exchange control implications when considering leaving South Africa permanently and that they would do well to heed the current regulations and rules.
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The Global, 24/7 Worker — Increased Risks Posed by Extended International Business Trips and Short-Term Assignments

Globalization in the 21st century has given rise to a keen demand for businesses to send the right resource (human, capital, etc.) to the right place at the right time. There has been a growing reliance by companies on extended international business trips (EBTs) and short-term assignments (STAs). Alison Shipitofsky and Glen Collins, IES professionals from New York City and Tyson’s Corner, Virginia, respectively, offer a summary of KPMG survey findings and insight into the changing global business world that EBTs, STAs, and other assignees work in, and what organizations can do to better support their global business goals while mitigating the risks associated with a globally mobile workforce.
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Never a Dull Moment When on Short-Term Business Trip Assignments in Africa — a Personal Perspective of an International Assignment Tax Professional

This article by Bob Rothery, an IES professional in Washington, D.C., offers a fascinating, personal glimpse into his experiences on short-term assignments in Africa. Follow Bob’s comings and goings between the U.S., Angola, and Nigeria, his inter-actions with other expatriates and locals, and his general impressions as he travels far and wide.
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Worldwide Digest

We are providing readers with a link to the IES practice's Flash International Executive Alert newsletters, which are archived right through the most recent issue on the IES Web site. Readers can scan the titles and select the news stories that are most relevant to their international assignment situations.
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