With OECD's Proposed Changes to Model Treaty Commentary on Article 15, Are They about To Open Pandora's Box?

In March 2007, the Organisation for Economic Co-operation and Development (OECD) issued a revised public discussion draft of proposed changes to its Commentary on paragraph 2 of article 15 of the OECD Model Tax Treaty. This part of the treaty is relevant to short-term business visitors. The changes the OECD is proposing attempt to assist with the interpretation of the treaty. However, upon reading the discussion draft, several questions and concerns arise, notes David Skinner, an IES professional in London. Learn what these are and what you might consider doing.
Read the article.

La Dolce Vita Could Turn Sour if Employers Are Not Compliant under U.S.-Italy Social Security Agreement

The social security totalization agreement between the United States and Italy contains some interesting and unique features, that, to some extent, set it apart. For both Italian nationals working in the United States and U.S. nationals working in Italy, it is important to be aware of the rights and obligations under the agreement. Moreover, there are important steps required of employers, on behalf of their employees, which, if not undertaken properly, could expose them to scrutiny and penalty and jeopardize the proper social security coverage and benefits of their employees.
Read the article.

Offshore Pension Funds—the Challenge to Employer Contributions

The historic tax treatment of employer contributions to both unapproved foreign pension plans and approved South African pension and provident funds is at risk of being challenged by the South Africa Revenue Service (SARS). South Africa-based IES professionals Carolyn Freeman and Cecelia Madden discuss the principles governing such contributions in respect of approved and unapproved funds (regardless of their status as pension funds under South African law). They suggest that companies’ pension or provident fund rules be reviewed to determine whether there is a possibility that employer contributions to the fund could be subject to challenge.
Read the article.

The Advance of Same-Sex Unions: Why International Assignment Managers Should Care

In countries and jurisdictions around the world, same-sex marriage and the less controversial version civil union are making headway. Since we first visited this topic in The Expatriate Administrator (No. 2003-03, Summer 2003), many new developments have made the topic more complicated for managers of international assignment programs. As more and more jurisdictions adopt some version of same-sex partnership, says Bob Rothery, a Washington, D.C.-based IES professional, companies may find it necessary to address the issues in their international assignment program policies.
Read the article.

How Do State Residency Issues Affect International Assignment Costs?

Molli Hull, an IES professional in Washington, D.C., reminds that when considering the tax costs of an international assignment, U.S. state and local taxes must be taken into account, in addition to U.S. federal income tax. In this article, which looks at state residency rules and the impact they can have on U.S. outbound and inbound assignment costs, the author notes that it is important to understand the tax residency rules and tax calculation methods involved in the assignment and take them into account when calculating the projected costs of the assignment.
Read the article.

U.S. IRS Releases Final Section 409A Deferred Compensation Regulations

This article by Terri Stecher, a tax professional in our Washington, D.C. office, looks at the application of the final section 409A regulations to certain stock rights granted in connection with the performance of services. Among other things, the final regulations continue to apply certain rules addressing modifications, extensions, and renewals of stock rights.
Read the article.

Technology Trends: Timely Global Compensation Reporting—Can Technology Help Manage Risk?

KPMG professionals Jim Partridge and Bob Sarsfield know that managing globally mobile employees is an immense challenge, but a necessary one in this age of business globalization. Obtaining payroll data and reporting the information for these employees are big parts of this challenge. The authors suggest that having a tool in place to collect and report employees’ global compensation in a structured fashion can enable organizations to better manage the costs and resources involved in this process. Companies typically have an inherent bias concerning the costs of taking the necessary steps to identify, acquire, and implement such a tool—but they should be reminded that the long-term benefits can be substantial.
Read the article.

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