Recent Section 911 Changes May Require Reassessment of Aspects of International Assignment Programs

On May 17, 2006, The Tax Increase Prevention and Reconciliation Act of 2005 was signed into law by U.S. President George W. Bush. The Act includes significant amendments to the foreign earned income and housing cost exclusions under section 911 of the Internal Revenue Code. These new provisions, which have a retroactive effective date of January 1, 2006, could significantly increase the U.S. tax liabilities for certain expatriates. Joan Smyth, IES professional in our Washington, D.C. office, notes that where companies tax equalize (or tax protect) their employees, the increased tax liabilities would impact the companies' cost of their international assignment programs.
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Great Aussie Attractions: Sun, Surf, and Savings for Expatriates

Australia's government, for some time, has maintained that the country's ability to economically compete on a global level is dependent upon its ability to attract internationally mobile, skilled labor. Amongst other methods, the government has used the tax system to heighten the country's competitiveness by such means as: changes to the taxation of employee share schemes and more recently, reducing the tax burden for temporary residents with the introduction of foreign income exemptions. In this article, Sydney-based IES professional Daniel Hodgson analyzes the latter policy move and what it means for temporary residents, their employers, and for Australia's ability to attract international talent.
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The U.S.-Netherlands Income Tax Treaty – Provisions Affecting International Assignments from the U.S. to the Netherlands

When an employer is planning to assign one of its employees from the U.S. to the Netherlands, it is crucial to understand how the tax laws of the two countries can be coordinated and are applied. Amsterdam-based IES professional Jenny Tom maintains that understanding the Netherlands-U.S. tax treaty and the coordination of the Netherlands and U.S. individual income tax rules will better enable U.S. employers to estimate their costs, as well as to take advantage of any tax planning opportunities, when assigning employees from the U.S. to the Netherlands.
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Clarity Comes to Third Party Home Sale Transactions

The relocation industry has successfully provided home sale assistance to employers and their employees for many years. Uncertainty and controversy, however, have existed in determining when or if the employees realize taxable income as a result of receiving the home sale assistance. Peter Sim, an IES professional in the U.S., writes how Revenue Ruling 2005-74, issued by the IRS near the end of 2005, has made great strides towards clearing up much of the uncertainty that previously existed with respect to employer-facilitated home sales by relocating employees.
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Are We that  Different? A Comparative Discussion of International Assignment Programs

International assignment surveys yield much useful information to multinational employers and the HR professionals they employ. In spite of the information and evidence they offer, many HR professionals and IA program managers are suspicious of surveys that do not include a majority of participants from their organization's particular country or region. Are the divergences between non-U.S. and U.S. organizations' IA programs so great as to make such things as international assignment surveys meaningless unless they are country- or even region-specific? IES professional Andrew Preston attempts to show that many aspects of IA programs are actually not significantly different, but, rather, are fairly similar, regardless of the program's home base.
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Short-Term Business Trips and Assignments: Why You Need To Run the Numbers

It's becoming increasingly popular for multinational companies to resort to short-term international assignments, business trips, and cross-border commuters, to achieve business growth objectives and keep costs — especially international assignments costs — down. When it comes to decision-making, companies tend to prefer addressing their business issue first and worry about tax and/or financial consequences later. However, tax is increasingly becoming a key business issue. This article explains why it is important to understand the various "items" that impact the tax cost of the assignment.
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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.
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