Anyone who has gone to a Relocation or Business Travel conference recently will have seen a session on managing your short term assignees or business travellers for the compliance risks they generate.
Depending on who is running the conference the session will likely have a certain leaning. If it is a Relocation conference, there will be a Taxation or an Immigration focus. If it is run by the Travel industry the session will likely focus on Duty of Care.
It is this split in focus that helps to fuel the confusion in organisations as to who actually owns the operational risks of managing Business travellers.
However, the problem could be getting a little more complex.
The Organisation for Economic Co-operation and Development (OECD) recently put forward 15 principles to the G20 Group of countries laying out guidelines for national governments to transpose into law. This is done with a view to standardising the global approach to corporate tax avoidance.
The Base Erosion and Profit Shifting (BEPS) guidelines are effectively a consequence of the legal mechanisms used by global multinationals to shift profits from markets with high corporation taxes to those with lower tax rates.
One of the key recommendations is to reduce the levels by which a company creates a ‘Permanent Establishment’ (PE). This effectively means the legal obligation to register and pay corporation and other taxes in the new or visited market.
In the past Business travellers really only created a potential personal income tax liability – now they could in fact trigger a corporation tax liability. This will certainly attract the attention of the C-Suite to the Business Traveller constituency.
In parallel there is also a greater focus on matching the Immigration status of a business traveller and the purpose for entering the country. In the past many business travellers have pushed the limits of short term visas to complete transactions but greater information sharing amongst authorities will increase the requirements for Corporates to better manage compliance. Understanding the purpose or project a business traveller is working on will become a key focus of BEPS compliance.
Duty of Care obligations highlighted by the recent terror events in Paris, Istanbul and Jakarta amongst others complete the third critical element that businesses need to focus on when managing their business travellers.
Some solutions exist in the market but they usually only address one vested interest.Big 4 Tax Consultancies offer Tax trackers but they usually are bundled with their full Tax Advisory services – a far more strategic purchase than a stand-alone Tax Tracker. Risk Management or Insurance companies provide Duty of Care Trackers but again they are usually bundled with extra products or services. Immigration trackers are few in number and tend to operate in isolation to other tracking elements.
Introducing Global Tracker, an innovative, proactive tracking software for the business traveller
As a leader in technological innovation in the relocation industry Going-there Global Destination Services has developed a single Smartphone App that tracks business travellers for Taxation, Immigration and Emergency location – all in one place. Days spent in each location are counted and upcoming Tax or Immigration thresholds are notified to the traveller and to the managing HR or Travel team so action can be taken immediately to prevent potential tax or Immigration penalties.
There is usually one constant in any business travel event – the traveller and their phone/device. Gathering data from travel tickets, expense submissions or security pass data all give information that is ‘after the event’. Most Travel Managers will admit there is often significant leakage from corporate travel policies so data may be missing. Many travel & accommodation providers are positively discriminating against the traditional Global Distribution Systems used by Travel Management Companies. Sourcing data from this area may be too late under the new BEPS rules to prevent a step cost in PE risk.
Adoption and behavioural changes required in attempts to roll out traveller Apps have improved significantly in recent years and even seasoned business travellers will use Apps like Uber or Airbnb while travelling. The incoming millennial generation has grown up in the App world so adoption amongst this demographic will be high.
The most telling element however will be the likely mandate from the C-Suite. If the actions of business travellers could now contribute to an unbudgeted corporation tax liability – with a consequential effect on profits – the behavioural changes needed will likely flow.
Corporate Global Mobility teams are the ones whose desks these issues will flow to with directives from above to “find a solution.” The GT Global Tracker app brings order to those three key business challenges. The Application records how much time the traveller spends in each country or state and,
- Monitors the time against local tax compliance requirements, providing live alerts of any impending local tax liability;
- Monitors time against visa and immigration requirements, providing live alerts of any impending infringements;
- Can transmit an instant safety alert to employees in locations where emergencies unfold.
If you want to learn more about the solution to a problem that is coming to your desk sometime soon, please email: firstname.lastname@example.org
Global Tracker is an innovative, proactive tracking software for the business traveller.
Liam Brennan is the CEO of GT Global Tracker – an award winning software product for tracking business travellers.