Global mobility and expatriate program year-end rituals

While this year has been unlike any other, it is coming to an end, with hopefully a drastically better one coming in 2021 (fingers crossed). As companies confronted new business challenges, global mobility programs did not just shut down and wait this out. While facing the challenge of dealing with a COVID-19 world, talent still relocated and expats were still sent off on assignment, remained in their locations, or repatriated. Yes, the volume of activity was dramatically reduced, but the same year-end processes still need to occur this year, like all the years previously, as it relates to global compensation collection and tax reporting.

Expat tax filing is part of that monstrous, pesky goal of keeping your global mobility program clean and compliant. Mobility programs that do this effectively usually have a well-oiled collaborative process with their expatriate tax partners, their relocation management company (RMC) and their own internal stakeholders like payroll, AP and internal tax. Your global compensation accumulation process can make for a cleaner and more streamlined ability to prepare those filings, and there might be room for cost savings in your current process. For more related to this process, take a minute and watch: "Global Compensation Accumulation - What Is It?"

In this article from GTN's Emre Kicik, he shares "best practices to help make year-end a little easier as you determine your authorization list for employee tax support, consider any policy adjustments, and handle year-end compensation collection and reporting." And that process starts with reviewing your active assignments, looking over your authorization list for the last year (2020), identifying those who no longer need services and adding in newly authorized mobile employees. 

One of his key suggestions that is unique to this year is to take a closer look at relocation expenses in 2020 as some of your relocation expenses may be treated as non-taxable due to the ongoing national emergency relating to the COVID-19 pandemic. 

COVID or no COVID, failure to file accurate returns, pay overdue employment taxes, file employment tax returns, and/or furnish correct wage and tax statements on a timely basis can result in significant fines. A compliant program is a more cost effective one, so be sure to collaborate with your RMC and tax partners to design the most accurate and efficient expat comp collection processes to prevent you from getting hit by unseen and unpredictable issues.

For more on the year-end process, watch: "What can my company do to make year-end reporting a breeze?"