In recent business team meetings, Katie Pietig, a member of our consulting team here at Plus, shared the latest on BEPS and its effect on corporations with globally mobile employees.
In October 2015, the OECD released its final recommendations on BEPS (base erosion profit shifting), in an effort to curb tax avoidance by multinationals. These changes are expected to have a big impact on global mobility programs. It's now more important than ever for global mobility teams to ensure accurate tracking of employees worldwide. Mobility teams will be critical in determining, not only where the company’s employees are working, but what job functions they are performing. The increased compliance risks as a result of BEPS mean that companies will need to ramp up data collection on their employees to ensure compliance and avoid the risk of serious fines. Going forward, it will be imperative that global mobility teams work to strengthen relationships with their corporate tax departments and the business units so that everyone understands the potential risk of even the shortest business trips. This demonstrates, yet again, how global mobility is becoming an increasingly strategic partner within the growing business.
This article highlights the changing landscape for global mobility and specific areas that will require increased attention, investment in technology and collaboration between departments.
If you have globally mobile employees, collating the employee data for each territory may be more complex than initially thought. The key question is in which territory should a globally mobile employee be reported? The answer will vary depending on the type and length of assignment, the employment contract and whether a global employment company is used. You’ll also need to think about ensuring the data on the CbCR is consistent with other employee information available to tax authorities, such as numbers reported on short term business visitor agreements and through visa applications.