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Tax Issues of Global Workforce Compensation: Equity Awards, Deferred Comp, and Compliance

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, June 4, 2020

Recorded event now available

This course will point out the issues of multinational employee compensation that tax professionals working with global businesses need to understand. The panel will discuss the caveats of sending workers to other countries, how to avoid or lower payroll and other taxes imposed in other countries, and how to structure global compensation packages in the most tax-effective way.

Description

Tax advisers working with multinational companies need to understand not only how to establish tax-effective compensation packages but also the tax caveats of sending employees overseas. Employee activities in foreign countries can create unanticipated reporting obligations, including payroll, local, and corporate income taxes. Failure to track all of an employee's travel--business, and personal--can create individual tax liability for the mobile employee as well. The proposed changes under BEPS include an expanded definition of "dependent agent" that may increase the number of mobile workers creating permanent establishments for their employers under this clause.

Equity awards may be granted in one country and vested in another. Deferred compensation arrangements in one country may be tax-deferred, yet taxed in another. Funded and vested foreign plans can be subject to taxation in the U.S. and can include accrued amounts if the employee is "highly-compensated."

Often companies try to maintain a payroll relationship within its home country. Other times the company may hire an employee through a foreign affiliate. Then again, outsourcing the global payroll obligation may the best alternative. Businesses need to select and structure the most effective cross-border employment arrangements after weighing the alternatives.

Listen as our panel of experts points out the challenges of mobile employment, including cross-border taxation of equity awards, the caveats of permanent establishment, and the impact of U.S. treaties on compensation. The panel will explain how to best structure tax-efficient compensation packages that mitigate and avoid additional tax and reporting obligations for the employee as well as the company.

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Outline

  1. Global compliance obligations
  2. Compensation
  3. Social Security and Medicare
  4. Foreign affiliates and outsourced compensation services
  5. Impact of COVID-19 on global compensation

Benefits

The panel will review these and other critical issues:

  • Establishing tax-effective compensation packages for global employees
  • Cross-border taxation of equity awards
  • Granting, vesting, and exercise considerations for mobile workers
  • Permanent establishment and cross-border agents
  • The potential effect of the BEPS initiative on cross-border employment

Faculty

McKenna, Kerri
Kerri McKenna
Managing Director
KPMG

Ms. McKenna has been practicing in the global reward space for over 15 years. She has deep technical and broad...  |  Read More

Slonek, Benjamin
Benjamin L. Slonek, j.d., LL.M., CPA
Senior Associate, Compensation & Benefits
BDO USA

Mr. Slonek specializes in executive tax and global equity matters.  As part of the executive tax practice, he...  |  Read More

Long, Amy
Amy Long
STS GES Manager - Expat
BDO USA

Ms. Long is a Manager in BDO’s Global Expatriate Services group. She has over 10 years of experience in the area...  |  Read More