Mobile Workforce – Challenges for the employer

in Tax, 17.12.2013

Today, employees work and travel across the world. Therefore, employers should be aware of the local requirements and the risks to manage their mobile workforce properly. To ensure compliance in several countries is becoming more and more a challenge not only for multinational companies but for every company who moves around its employees. The implications of a mobile workforce are complex, dynamic and challenging.

In it’s International Assignment Policies and Practices Survey, KPMG has asked companies with a mobile workforce about their processes, legal issues and global mobility management. The results form the survey this year highlight several areas where mobility departments are becoming increasingly aware of areas of deficiency in global processes within their own organizations, where new policies are needed or where there is a need to work more closely with other departments in order to ensure compliance. These challenges for mobile workforce departments include:

  • The development of new policies such as local plus for BRIC countries as increasing numbers of employees are expected to be transferred to these locations in the future.
  • The need to formalize policies for tax protection on assignment payments received after the end of an assignment.
  • Improved global controls around tax, social security, global compensation reporting and business travelers.
  • Closer working relationships with Group Tax and Legal departments are required to ensure better risk controls around corporate tax, BAT and employment law issues triggered by international assignments.

In addition, based on my experience, the following subjects remain top of the global compliance agenda for mobile workforce professionals:

  • Permanent establishment risks
  • Corporate location analysis
  • Work permits
  • Data protection and privacy requirements
  • Transfer pricing and VAT

The mobility strategy has to constantly adapt to meet the growing number of challenges posed by the business. While transfers to developing countries are becoming more frequent, there is an increased focus on local to local transfers and developments of local to local policies.

 

 

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