business travelers assessing tax and immigration risks 25 august 2015
TRANSCRIPT
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Business Travelers
Assessing tax and immigration risks
25 August 2015
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Agenda
• Defining a business traveler?• What are the risks?• Why the focus now?• How are leading organizations managing this
population?• What should you be doing?
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Defining a business traveler
An employee who travels outside his or her home country for business and who is not on a formal assignment or transfer
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Are you at risk?
• Deal teams around acquisitions• New market entry• New product launches (sales/ marketing/
training)• Group functions, e.g. internal audit or legal• SWAT teams (IT, maintenance)
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Polling Question
Does your organization support business traveler compliance in a similar way to how it supports employees going on expatriate assignments?A.Yes – business travelers get same supportB.No – business travelers don’t get any supportC.Somewhat – we provide limited support to our business travelersD.I don’t knowE.Not applicable
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Factors that influence risks
• What are the travelers doing?• How long is the travel?• Who is the employer/ beneficiary of work
performed?• What is the corporate structure?• What level is the person who is travelling?• Where is the person going?
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Risks inherent with business travelers
• Many different factors to consider
• Some are risks to the individuals
• Most are risks to the organization
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Polling Question
Do you consider a business traveler issue in your organization to be of:A.High riskB.Medium riskC.Low riskD.I don’t knowE.Not applicable
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Business implications of the identified risks
• May not be able to do business in that country• May not be able to bid or receive a
government contract• May not be able to get the traveler in (or out)
of that country• Brand may be damaged
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What has changed and how do authorities go about identifying business travelers?
• Advanced border technology– Immigration and tax authorities are sharing information– Countries are sharing information to scrutinize immigration status– Authorities are using more sophisticated tracking and reporting
systems to collect the information– By conducting analysis authorities are linking corporate deduction to
individual filings• Organizations have access to better information– Data can be shared more readily from travel providers, expense
reporting, and inter-organization departments• Costly remediation
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Why are authorities increasingly focusing on business travelers?
• The global economic climate• Increased sensitivity about protecting domestic labor market• Governments want to increase revenue
– From employers: unforeseen triggering of a permanent establishment– From individuals: may be obliged to file/ remit taxes in multiple
jurisdictions• Business travelers present an untapped source of revenue• Because they can!
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Consequences
The consequences of not managing risks created by business travelers are severe:•Fines•Deportation of employees•Damage to business reputation•Lost business opportunities
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What are we seeing in the marketplace?
Organizations are beginning to take action through a variety of methods:•Beginning to review the issue•Highlighting the issue to executives•Establishing business traveler policies•Systems are being put in place to track travelers
– Automation vs. manual and internal vs. external•Establishing certain thresholds•Quantifying risks•Establishing accruals•Reviewing the need for remediation
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What are the biggest hurdles?
• Who owns this problem/ risk?• Discuss risk/ reward or cost/ benefit• Explore the ownership between human
resources/ travel/ operations, etc.• Privacy issues/ changes in policy
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Polling Question
Does anyone in your organization own the business traveler population:A.YesB.NoC.I don’t knowD.Not applicable
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How can you tackle the business traveler issue?
• Gain sponsorship of key executives• Identify an owner• Develop a plan
– Create a cross-functional team– Identify and tracking of individuals– Assess risk and business implications– Apply appropriate tolerance levels– Establish controls, policy, processes and level of automation
• Educate all stakeholders• Be proactive and communicate