The European Union's expected rulings that Starbucks and Fiat Chrysler got illegal tax breaks might be just the start of a crackdown, with bigger battles against Apple and Amazon on the way.
If your company sends staff abroad, there are advantages to having a tax equalisation policy. It will offset employee tax burdens associated with overseas assignments while ensuring employer tax compliance in home and host countries. Many of these policies are shaped more by company philosophy than legal requirements. But making the right decisions about what to include in the policy is critical to achieving a balance between attracting and retaining top talent, maximising tax advantages, and streamlining expatriate tax reimbursement processes and payroll administration.
The European Union said it will require Starbucks Corp. and Fiat Chrysler Automobiles to pay tens of millions of euros in back taxes after ruling that tax deals they negotiated with two European governments were illegal, in an unprecedented decision by regulators that risks blowing open thousands of corporate tax structures across Europe.
Many UK employers and employees do not realise that staff sent abroad may have to pay taxes and file personal tax returns in both the UK and the host country.