Managing Risk and Compliance

Integral to achieving an effective global mobility strategy is a keen understanding of the compliance landscape for the territories and industry sectors in which our clients operate.

We recommend every company to examine its expatriate tax program and assess whether:

• it achieves individual tax and social security compliance and payroll reporting requirements,
• minimizes tax authority reviews and challenges,
• and manages both the individual and corporate tax and compliance risks inherent in global deployment.

Tax compliance & payroll

Multinational companies today:

• Navigate the intricate and dynamic nature of national and regional tax regulations;
• Control risk against a vast, global backdrop
• Coordinate assignees' taxes; and
• Find the right technology to help manage it all.

Achieving these goals can seem daunting, but it’s not impossible. PwC’s International Assignment Services (IAS) practice helps companies address:

• Home and host country tax filing requirements
• Permanent establishment risks created by international assignees
• Global compensation reporting and payroll withholding
• Individual tax compliance risk management
• Non-resident tax filing requirements
• Cost estimation and management
• Accounting for assignment costs and taxes
• Equity tax planning and trailing liability management
• Creating tax-efficient employment structures
• Using technology to support accurate and timely compensation for employees working abroad

How can we support you

PwC’s global tax network as well as professionals from PwC Slovakia have the knowledge and practical experience to help you address your most complex tax positions and tax authority controversies. We have extensive experience resolving issues related to:

• Short-term assignees,
• Frequent business travellers,
• Tax treaty matters,
• Transfer pricing for cross-border labour, and
• Expatriation, foreign tax credits, treaty issues, and foreign-earned income and travel expenses.

Permanent establishment risks

The international relocation of employees on short and long-term assignments (typically anywhere from 3 months to 5 years) may create so-called permanent establishment (PE) risk in the foreign country for the enterprise. Companies may fail to establish or enforce guidelines designed to limit the creation of a taxable presence for the home country employer. The actual presence of the individual in a foreign jurisdiction may create an unintended taxable presence.

Corporate tax departments need to understand the structure and nature of temporary international work assignments. How many employees will be working in a particular location? What activities will they be doing? What is the duration of time in-country as well as the long-term plan for operations there? Clarifying all of these factors is necessary to gauge the level of enterprise tax risk by jurisdiction. Working with HR departments and monitoring this risk for global mobility programs should be a fundamental part of the corporate tax department’s risk management activities.

Immigration

A global economy requires a global business strategy, which invariably involves the need to move your most important asset - your people - fluidly and expeditiously across borders.

But today there’s much more to a global mobility strategy than securing work visas and residency permits, and assuring unimpeded business travel - as critical as those functions are. Business planning also requires you to take a strategic approach to immigration, which means having your finger on the pulse of pending immigration changes across multiple countries and regions.

As government tax and immigration departments increasingly share information about multinationals, it makes sense to work with a legal services provider with a marquee brand, government know-how, and a global reach who can provide effective, integrated immigration and tax advice - saving you time and expense, and streamlining processes. PwC is capable of being such support for you.

Social security

Growing your business often means moving employees between countries – and that means fulfilling local social security obligations. In an environment where regulations change continuously and scrutiny from the authorities is on the rise, it’s becoming harder to get it right.

Just like PwC‘s worldwide network, also social security experts from PwC Slovakia maintain close links with government authorities to keep you up to date on social security developments and to help you to reduce your risks.

Cost reduction and tax planning

PwC approaches tax planning with a holistic perspective. We do not simply provide individual tax planning for expatriates, but we consider corporate tax, payroll, accounting, risk management, and administrative effort. Based on our experience, most clients are interested not only in savings, but more importantly in maintaining your corporate reputation. As such, the tax planning we recommend always factors our client’s desire to be globally compliant.

PwC identifies opportunities to add value from the first day we work with a client, including:

• Reviewing your tax filing positions, equalisation policies, payroll reporting and withholding practices, handling of equity-based compensation, and inter-company charges relating to expatriate compensation to identify opportunities to reduce costs and manage risks.
• Examining whether your processes are aligned with peers and other well-run organisations, identifying opportunities for cost synergies.
• Benchmarking your assignment and tax equalisation policies against competitors.