For Companies
We help you create a solid plan, grounded in your business strategy and goals for your international business.
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- Determine how you will structure your presence in the new country. Sending an employee to a foreign country could create a permanent establishment for your business and could subject you to taxes there. You will want advice to understand such consequences.
- Understand the tax treaties of the countries in which you’re doing business. Only pay what you owe.
- Calculate your total costs. They can extend far beyond an extra executive bonus and a little help with the kids’ tuition. What can you realistically afford against the ROI you expect?
- Make the commitment to keep your employees whole. If you financially penalize employees for going overseas, you may be creating bigger problems. Recruiting expatriates and inpatriates is tough enough, so treat them fairly.
- Establish an equalization policy and a compensation policy. Standardize the way you calculate “keeping employees whole.” Put your policies in writing and keep them up-to-date.
- Set up smart payroll systems. It pays to have a payroll system familiar with international issues.
- Get smart about social security issues. Should your employees, and you, pay taxes here or there? What’s the best deal? How does totalization work?
- Navigate retirement investing. Does a 401(k) or 403(b) make sense for expatriate or inpatriate employees, or are there better options?
- Take advantage of foreign tax credits. You earned them, so make sure you use them.
- Get employees the help they need to productively live abroad. Many expatriates and inpatriates bring special talents that are hard to find and replace. Make their assignment rewarding by providing the help they need with everyday living.
For Individuals
While working overseas can be exciting, it takes careful thought and planning to keep it rewarding and enjoyable. At EFPR Group, we help both companies and individuals traverse the intricacies of working internationally by managing compensation and tax issues and helping with the daily details of living. Whether you work for an employer with an established strategy for international employees or you’re just beginning, here’s the Top 10 Checklist for Working Abroad.
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- Determine your tax consequences. You could be subject to double taxation, foreign filings and special fees. Be prepared. Don’t pay more than your fair share.
- Watch the calendar. Some of the special rules for foreign tax credits and foreign income exclusion require that you establish residency in your new home for a certain period of time. To avoid double taxation, you may have to extend the deadline for your tax return.
- Understand what is included in your compensation. Who will pay for housing, education, security, domestic help? Will you be reimbursed for any additional taxes? Will that compensation for expenses also be taxable? In which country will it be taxed?
- How will your visa or immigration status affect your taxes? You may think you’re not a resident because you’re on a work visa, but the tax agency of your new home country may disagree. If you are a student, a professor, self-employed or a contractor, there might be different rules.
- How does your spouse file taxes? It’s best to run the numbers both ways, filing jointly or filing separately, while taking into account the foreign tax picture, before you choose a filing strategy.
- How do you save for retirement? Who collects social security withholding? Should you invest for retirement, through your employer’s domestic plan or your own? What are the tax implications now, and when you’re ready to withdraw retirement funds?
- What should you do with your house or other property in your country of origin? Consider if it is best to sell, rent, or take it with you.
- How will your performance be judged? How will you know you’re being successful in your new posting, especially if you’re the only employee in that country? Who decides when you get a raise? Make sure you understand the terms of your employment.
- Take care of the “living” details. Where will you live? Where will you shop? How will you get around? Do you need to learn a language? Where will your children go to school? Will your spouse be able to carry on with a career? What are the cultural differences you’ll need to understand? Can you get help from your employer, or on your own?
- Returning home. When your work overseas is concluded, you generally need to close out your status in an organized and official fashion, surrendering visas and immigration cards to be sure that your tax liability doesn’t continue after you have returned home.
About EFPR
For over 60 years, our knowledgeable and experienced team of CPAs and business consultants have been serving individuals and businesses in Western New York and around the nation.