German Tax Traps When Rolling Over Pension Distributions into IRAs

Assuring one's financial security for retirement is an important financial goal for many people. Taking an international assignment can make this a little tricky, however. Munich-based IES professional Michael Köhler takes a look at the pension arrangements in the United States and Germany, with a focus on the respective countries' tax treatment of contributions to, earnings accrued in, and distributions from pension plans.
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New Canadian Guidance Issued for Payments to Nonresidents for Canadian Services

Jim Yager, with KPMG in Canada, writes that many companies send employees on business trips to Canada without considering the Canadian withholding and reporting obligations. Until recently, he notes, there has been some ambiguity in the Canada Revenue Agency's (CRA) policies on whether Canadian income taxes must be withheld on payments for services of a Canadian nonresident in Canada. However, CRA recently issued a revised version of Information Circular 75-6R2 which clarifies its policies in this area; nonetheless, the CRA's strict new requirements could create significant new burdens for nonresidents providing services in Canada and those who pay for such services.
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Determining Residency for U.S.-Mexico Cross-Border Workers Is Key to Compliance

U.S. employees who commute regularly to work in plants (maquiladoras) along the Mexico border may be subject to nonresident Mexican income tax where the employer is required to withhold and remit tax to the Mexican tax authorities. To ensure compliance obligations are met, explains Chicago-based IES professional Doyoung Yong, the employer should first determine the residency status of the employee for Mexican tax purposes—whether a resident or nonresident. Read this article to learn more about determining residency status for Mexican tax purposes and meeting the compliance obligations for U.S.-Mexico cross border workers and their employers.
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After the Fall: Foreign Currency Exchange Issues Can Have Unintended Consequences for International Assignments

When undertaking an international assignment, the employee and his or her employer have many things to consider: compensation, housing and relocation, new work environment, visas and immigration, etc. An often-overlooked consideration, however, is the foreign exchange aspect of compensation and taxation. The complexities of foreign exchange rates and how currency fluctuations impact the employee's liability to tax are examined in this article by IES professional Bob Rothery, by means of a few 'hypothetical'—but realistic—case studies.
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An International Assignment Outsourcing Experience – Assisting a Company To Go Global

The international assignment marketplace since the 2002 Sarbanes-Oxley Act has been very dynamic with many companies replacing their international assignment services providers. Although new clients, in recent years, have typically been multinational companies with existing international assignment programs and assignees, Dallas-based IES professionals Cindy Davis and Jerry Strickert worked recently on a few engagements involving companies that were just entering the global market and sending their first employees on international assignments. They recount the issues and challenges faced with one of these clients and how effective collaboration with the client and its vendors produced satisfying results.
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Worldwide Digest

We are providing readers with a link to the IES practice's Flash International Executive Alert newsletters, which are archived right through the most recent issue on the IES Web site. Readers can scan the titles and select the news stories that are most relevant to their international assignment situations.
Go to IES practice's Flash International Executive Alert newsletters