"Business travel accounts for $1.3 trillion of global spending annually meaning more organisations are sending employees abroad." In the article below, David Livitt nails down the last of a three-part series related to the ever-popular topic of properly managing international business travelers (IBTs). The first two parts of the series explored the rules related to business travelers into Canada and into the UK.
Mr. Livitt explains that the IRS is pretty clear regarding U.S. tax law for business travelers.
"If a foreign employer is engaging in providing services in the US, and a non-resident employee is performing these services, this individual is subject to U.S. income tax based on his or her workdays unless all of the following criteria are met:
- They are an employee of a foreign corporation or office
- They are temporarily present in the U.S. for no more than 90 days during the calendar year
- The pay relating to these services does not exceed US $3,000"
Ultimately, applying a 183 day threshold is not going to work and the advice from GTN is that keeping track of and reviewing your business traveler population on a regular basis is an important business decision that will help manage corporate and employee risk.
There are a number of countries that expect an employer and/or employee to track and report business travel as a non-resident. Simply applying a “183 day” threshold is not going to work. Over the last couple months, we explored some of the rules related to business travelers into Canada and the UK. These countries are very clear on what inbound business travelers need to do from a statutory requirement. As we end our series, we turn to the Internal Revenue Service (IRS) individual income tax reporting requirements for business travelers into the US.