The surging growth of business travel in recent years has created multiple immigration, security, payroll and tax risks for organisations and employees alike. As a result of employees spending increased time working in foreign locations, corporate income taxes and withholding taxes may be triggered for the business at an organizational level. In addition, individual employees, who travel between various jurisdictions, may be left vulnerable to social security and income tax of the areas they find themselves in.
Evolution of the Compliance Landscape
Considering how unpredictable the nature of business travel can be, often spontaneous and based on need, it’s easy to recognise the inherent difficulties as organisations often find it challenging to manage varying levels of exposures brought on by immigration, tax and social security compliance requirements.
While doing nothing may seem like the easiest path to take, it may no longer be acceptable, due to the association of immigration and tax, along with the growing and automated exchange of information between authorities.
Increased emphasis has been placed on immigration compliance by initiatives to protect national work forces, along with increased border security, due to the current geopolitical climate. The rationale for the Posted Worker Directive 2018/957/EU for instance, was primarily to protect employment rights within lower and higher-cost European territories.
Business travellers are generally limited in the scope of activities they may perform, differing from one country to another. For instance, where one country may be accepting of travel consisting of a few days spent attending meetings, with time spent elsewhere for special projects, immigration sees it as a red flag.
While responsibility for corporate income taxes sits squarely on the shoulders of the organisation’s finance and tax teams, compliance with employee taxes generally falls upon those in Human Resources to advise – communication is key here. Business travellers create risks that are not restricted to a single business function. In order to work together, these teams must coordinate with one another. This is fundamental to the success of the management of any organisation’s business travel policy.
Business Travel Management: The GT Global Tracker Approach
Our Global Tracker platform can help in taking the first initial steps to driving compliance throughout your organisation, by identifying and quantifying potential exposures. By including all the relevant and multiple internal stakeholders in the process, our platform offers a single solution – integrated with travel management systems, HRIS and / or other internal systems, to deliver multiple back end solutions to stakeholders, while giving the traveller only one point of interaction.
In order to bring awareness of tax and immigration considerations (prior to departure), employees enter their trip details for authorisation. With our pre-trip approval tool, Human Resources can determine whether proposed trips are likely to result in compliance considerations, in advance. These pre-trip approvals can also be incorporated into other measures that take place before trip finalization, such as budgetary and security approval processes. Each unit can facilitate individual travel requirements and consider their own appropriate action, based on a more informed perspective.
A recent case study written by GT Global Tracker CEO Liam Brennan and published in the Winter 2019/2020 edition of International HR Adviser, outlines how we have successfully implemented a business traveller management solution, building a multi-functional team incorporating multiple stakeholders. Please click here to view.
International HR Adviser is a quarterly magazine, distributed to International HR professionals worldwide. For more go to http://www.internationalhradviser.com/ and download the latest edition
Cover Image by skeeze from Pixabay