Planning Your Employee International Assignments

Article Excerpt:

If your organization operates globally and selected employees are assigned to international locations on behalf of your company, you and these employees should be cognizant of the complexities of international tax requirements. Here is some information which may assist you in strategically handling such assignments. 

Backdrop

The U.S. Internal Revenue Code (IRC) Section 162(a) allows a business to deduct all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including:

• a reasonable allowance for salaries or other compensation for personal services actually rendered;
• traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and
• rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which the taxpayer has no equity.

Let’s discuss considerations around travel and lodging out‐of‐pocket expenses and allowances.