PKF O’Connor Davies | The 360° View of Global Mobility

• Global mobility programs require integrated tax, immigration, payroll, human resources (HR) and duty of care support to manage cross-border compliance, risk and employee well-being.
• Early global mobility tax planning addresses permanent establishment, transfer pricing and global minimum tax risks while supporting remote work and international assignments.
• Employee mobility strategies include equity compensation, foreign account reporting and relocation tax guidance to reduce compliance risk and support global workforce planning.

Today’s global workforce environment requires organizations to address a broad range of mobility considerations that extend far beyond tax compliance. Despite world economic and geo-political uncertainty, companies are increasingly looking to send employees to work and hire talent from different parts of the world, whether on a short-term or long-term basis.

This is the first in a series of articles exploring key global mobility considerations for employers. We begin by looking at why successful mobility programs require coordinated tax, immigration, payroll, HR and duty of care support to manage risk and support employees working internationally.

Employees increasingly work across borders. This can be through:

• International assignments
• Business travel
• Remote work arrangements
• Permanent relocations

Employers face growing responsibilities related to compliance and employee well-being.

The rise of artificial intelligence is another factor that is reshaping global mobility. Not only does AI enable cross-border work, but also changes who moves, why they move and the risks associated with those movements.

Successful global mobility requires relationship-centered strategic support, not merely human resource (HR) transactional functionality. Employers demand coordination of legal, tax, immigration and HR requirements tied to international work as well as support for remote work across borders.

Address Tax Considerations Early

Early global mobility tax planning lays the foundation for successful mobility and supports risk mitigation, cost control and workforce objectives. Key considerations include:

• Permanent establishment risks
• Transfer pricing
• Indirect taxes

While the Pillar Two safe harbor provides greater certainty for U.S.-based multinational companies, global minimum tax pressures remain relevant. This is especially true for digital businesses, organizations managing remote work across borders and companies relocating operations to value-creation centers. Tax planning also helps businesses prepare for unanticipated consequences.

• What if a planned temporary relocation becomes permanent?
• Do tax strategies leave the employer prepared for unplanned cross-border remote work or business travel?
• If employer/employee relationship is not successful, does the employer have an exit strategy?

Successful Employers Consider Employee Perspective

Just as employers should work with relocation experts to address employee housing, safety and evacuation mechanisms, companies seek to protect employees from unexpected tax liabilities. This is particularly true for permanent one-way transfers.

Here are just a few considerations –

• How are you advising inbound employees with equity compensation, such as Restricted Stock Units (RSUs), stock options or global bonus plans to navigate U.S. tax requirements? Is the employee positioned to take advantage of capital gains treatment?
• Relationships can get sour. What are the taxable consequences for a U.S. national employee who decides to expatriate?
• Where does the employee bank and what fund transfers occur? Report of Foreign Bank and Financial Accounts (FBAR) and other information return penalties add up quickly and should be contemplated when considering compensation and banking logistics as part of tax planning.

While it is natural for employers to look to save costs in the relocation process, the potential financial implications of a move are sometimes surprisingly omitted from the scope of an employer’s duty of care. Global mobility professionals should be positioned to advise on this duty of care for tax and all planning considerations.