Cross-border assignment and international secondment
Cross-border assignment and international secondment, what does that involve?
If you consider cross-border assignment or international secondment, you want to know about the implications in advance. This prevents uncertainty, fines or other issues, both in your own country and abroad.
We issue advice regarding the possibilities and outline the implications, both for the employer and the employee.
What could go wrong?
Incorrect payment of taxes or social insurance premiums is frequently only detected when it is too late to correct it. For example, when an employee needs a benefit, or during a tax audit.
This results in corrections and fines, and of course financial issues for the employee.
Additionally, many countries actively verify compliance with the requirements that apply to foreign employees. For example, non-compliance with the disclosure requirement may be a reason for local inspectors to impose fines or to implement civil law or criminal law measures. Finally, take into account that pursuant to international tax treaties, countries may exchange information, and actually make use of this option in practice.
How to prevent problems
Every situation is different! That means it is important to review the applicable rules for each employee working abroad in advance. Please note: taxes and social insurance premiums are not by default paid in the same country.
Frequent problem situations:
- No tax or social insurance obligation, but subject to disclosure requirements
No tax or social insurance obligation, but subject to disclosure requirements
Sometimes you do not need to pay taxes or social insurance premiums, but you are required to submit an official declaration abroad. This sometimes applies for secondment, even if your employees will work abroad for just a few days!
- Paying taxes abroad from the first working day
In specific situations, a company may be liable for payroll tax abroad from the first working day. However, this is often not the case pursuant to the so-called 183 days rule.
- Taxed in one country and payment of social insurance premiums in another country
An employee is insured in one country and liable for tax payment in another country (this is referred to as cross-border work).
- Split salary
The company pays tax on the employee’s salary in more than one country.
Let’s get started!
We have in-house expertise to show you the ropes in cross-border work situations and unburden you completely regarding international payrolling. Based on the right starting points and payment of the correct amounts in social insurance premiums and wage tax or payroll tax in the correct countries.