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The Global Business Traveller 

Many Canadian companies send their employees on short- or long-term assignments to countries all around the world, while many non-Canadian companies send their employees to Canada for assignments. When your company is weighing the costs and benefits of such assignments, it’s important to be aware of the different tax implications in each country you send people to, both for your employees and for your company.


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Business Travellers – Managing the Tax Risks

 

Managing the risk of tax exposure in of the countries where you send your employees and ensuring you comply with all the relevant requirements can help make your international assignments as cost-effective as possible and help you avoid unpleasant surprises.

 

Companies sending business travellers around the world may have to consider the following tax issues, among others:

 

  • Keeping track of employees' travel to determine their income tax and social security tax obligations at home in foreign countries
  • Meeting the company's income tax and social security tax reporting and withholding obligations
  • Dealing with the risk of creating a "permanent establishment" in the foreign country and other corporate tax issues
  • Managing exposure to indirect taxes incurred on employees' costs and services they provide
  • Ensuring that inter-company charges meet appropriate transfer pricing guidelines and rules.

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Managing extended business travellers

 

KPMG's Business Travellers team coordinates all of the appropriate services to help ensure that your company and business travelers can reduce the tax burden, enhance efficiencies, and comply with all of the tax rules. The coordinated services include:

 

International Executive Services

KPMG's International Executive Services group can help you effectively manage the tax and business risks arising from your business travelers on short- or long-term assignments. Using our special software and tools, we can help you identify and track employee travel and estimate tax obligations.

 

We can help you design and implement business traveller policies and help you communicate these policies to the business travellers and program administrators. We can also provide tax counselling sessions to your employees, prepare their Canadian, US, and foreign tax returns; and prepare tax equalization reconciliations, where required. We can even assist with implementing appropriate payroll systems to comply with complex payroll reporting and withholding requirements.

 

Your multinational company with business travelers may face other corporate tax and transfer pricing issues that KPMG can help you manage. We can help your company identify tax and other compliance matters associated with your business travellers in the US and other, countries and help you develop an approach to managing these matters that is tailored to your organization.

 

US Corporate Tax Services

Business travellers to the US can create permanent establishment and state tax nexus issues to their employers arising from limited travel to the US. Advanced planning can help limit these potential liabilities. Canadian companies doing business in the US should regularly review their US-focused business activities to determine whether they are minimizing their US corporate tax exposure and complying with US federal and state tax reporting requirements. KPMG's experienced US Corporate Tax professionals can guide you through the requirements so you can develop a strategy for your business travellers that meets your particular business needs.

 

International Corporate Tax Services

Our International Corporate Tax Services professionals work closely with their local counterparts in countries around the world to tap into local knowledge and take the necessary tax laws and regulations into account. As a result, we can help your tax team effectively structure and adapt your operations, including those affecting business travellers, to local environments.

 

Transfer Pricing Services

Transfer pricing—the price at which products and services are transferred between international subsidiaries and similar entities—is one of the more pressing tax issues currently facing multinational corporations. When business travellers cross international borders, corporate resources frequently transfer between related entities and branches. The tax authorities of various countries may adjust the tax liabilities of international businesses, unless appropriate charges are made for these intercorporate transfers.

 

KPMG's multidisciplinary Transfer Pricing team of economists, tax practitioners, lawyers, and financial analysts can help you establish policies that can make your transfer pricing commercially viable and tax-efficient, and help you ensure that your business travellers' activities are included in these policies.

 

Our Business Travellers' group will coordinate all of these services and issues to help you operate efficiently in your global environment, with the comfort that you are complying with the global tax rules.