In an ideal world most of us prefer to find a job or follow a career within a location that is easily accessible on a daily basis without too many negative impacts on family life. But, as we all know this is not always possible and if you are employed for a big corporate, travel may by a frequent requirement in your job. Business travel can take on many forms: business trip of a night to a week, extended business travel of 3 months or less, short-term assignments of 6 months to a year, long-term assignments of a year or more and permanent relocations. All off which have financial implications to the company and various government initiated policies which have to be adhered to depending to the country travelling to.
It is short-term business travel that is on the rise according to a KPMG report published in 2008 as companies globalise and see the financial reward for creating virtual project teams rather than relocating staff and dealing with all the legal implications involved. Short-term business travel is recognised as being vital for exchanging ideas and getting employees to work together. But, if these trips are not planned and carefully monitored, they have the potential to create a host of income tax and National Security implications.
Guidelines for business travel to an international location
- Long-term assignments of more than one year could create income tax, payroll tax and social security obligations for the employee in that country.
- Ensure employees travel with the right immigration documents and that their stay does not exceed the period granted to avoid fines or future travel restrictions.
- Avoid employee being put in a position where they partake in certain activities such as the signing of important contracts on their employer’s behalf, as this could be construed as creating a permanent establishment there and therefore opening the company to taxation as a resident in that country.
- Proper planning and research should be done ahead of employee travel that takes into account domestic laws, administrative policies, and potential tax treaty relief.
- Find accommodation that meets employees needs, is secure and maintains a high level of motivation while on assignment – often away from family and loved ones.
While business travel planning is the responsibility of the company, finding and booking accommodation need not be a laborious process. Hotel accommodation is not the only option available for business travel. With the advance of the serviced apartment industry, there is a more cost effective choice available offering a home-from-home environment with space and privacy.
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