U.S. Tax Reform and Global Mobility among Key Issues Discussed at BDO’s 2018 Global Expatriate Services Conference

Regulation changes such as U.S. tax reform are changing the way in which companies do business. Domestic relocation and global mobility managers are faced with new challenges and must consider how new regulations impact their programs, their company and their assignees. 

U.S. tax reform included several changes that impact business travelers. In addition to new tax brackets for individuals in the US, there were also several changes to itemized deductions that limit the amount an individual can claim, including moving expenses. These issues and more were discussed at this year’s Global Expatriate Services Conference.

 

16^th Annual Global Expatriate Services Conference

On September 17 and 18, the BDO Global Expatriate Services network held its 16^th annual conference in Washington D.C.  The conference alternates locations around the world each year and has been held in cities such as Berlin, Paris, Montreal, London, Brussels, Madrid and Johannesburg.

This year’s conference attracted approximately 100 participants from about 25 countries and included BDO expatriate tax, payroll, equity and global mobility professionals; their immigration, systems and relocation partners; clients; and other friends of the firm.  In a relatively intimate setting with plenary, breakout and roundtable type sessions, conversations and workshops were held discussing:

• How current immigration issues are impacting mobility programs
• State responses to U.S. federal tax reform that create complex payroll reporting and income tax filing obligations
• Various country tax updates by region including North America, Latam, Europe and Asia
• How business travelers continue to be a hot topic in this space and companies are moving slowly towards what is needed to be able to comply fully
• The growing need to continually review and update a company’s relocation and tax policies with the ever changing environment – whether it be taxes, immigration, or simply generational factors
• Benchmarking and survey results, from employer and employee perspectives, around what is desired from a mobility package/benefit standpoint
• How data privacy and new GDPR regulations out of the EU are adding to the complexity of administering a global mobility program and the crucial need for secure, robust technology to alleviate concerns

 

The Emergence of a Globally Mobile Workforce Generates New Complexities

Another topic discussed was compliance issues and the impact on companies with business travelers. Staffing trends over the past decade have continued to show a decline in the number of traditional long-term assignments. There has been an increasing shift towards shorter-term movements of employees.  This emergence of a globally mobile workforce has allowed companies to maximize talent where it’s most needed. However, it has also generated new challenges when it comes to handling tax compliance.

In a recent Weichert Workforce Mobility survey, 86% of companies said that their biggest challenge in administering extended business travelers is assuring compliance with tax rules.

Effectively managing a global workforce requires a strategic approach, and automated tools can help companies to track the movement of business travelers and to better understand the tax implications of each assignment.

To help our clients address these challenges, BDO has invested in a number of digital tools.

• BDO QuickTrip is a smartphone app used by business travelers, and provides employers access to traveler information and real-time reporting to assist with tax compliance.
• The BDO Compensation Tax Withholding Solution provides tax withholding related to global equity.  This tool calculates in real-time the withholding needed anywhere around the globe when equity is granted, vested, exercised or is sold by a mobile employee.
• The Global Equity Rewards Matrix is designed to report such withholding requirements on a country-by-country basis, and is available as a smartphone app and can be accessed on the BDO website. 

It was evident throughout the conference that now is the time for companies to review their mobility and travel programs, as well as current policies and procedures, to determine how tax reform, both U.S. and international, will impact their bottom-line.

Jim Carroll, Senior Global Mobility Manager for WestRock and an attendee of the event, commented, "the conference was a great opportunity to dive deeper into tax-related topics that are covered by other means either at too high a level or not at all. Connecting with global contacts throughout the BDO organization was also very valuable."

BDO will continue to offer complimentary seminars, webinars, roundtables, insights and alerts to bring you the latest in global mobility topics, changes and trends. Subscribe to BDO publications or update your profile to further customize the information you wish to receive.