I recently wrote about travel risk management programs, with a focus on duty of care around traveller health, safety and security for business travellers. When it comes to global mobility, there are another two important areas to consider in an holistic travel risk management program – risk and compliance around tax and immigration.
Whilst many organisations do have a focus on duty of care when it comes to employees travelling, risks associated with non-compliance around tax and immigration laws are often overlooked, or sit outside the travel function.
In addition, employees on short and long-term assignments, away from their “home” office, often fall outside the definition of “business traveller” and are therefore overlooked in the duty of care policies and processes.
With today’s increasingly mobile workforces, risk and compliance are an important consideration, particularly as the focus and scrutiny from immigration and tax authorities around the world broadens, and global authorities sharing information increases (such as the BEPS measures).
According to KPMG’s 2016 Global Assignment Policies and Practices Survey of over 100 organisations:
- 83% those surveyed offer short-term assignments (less than 12 months);
- 97% offer long-term assignments (1-5 years); and
- 61% offer permanent transfer/indefinite length assignments.
Over the next 5 years those surveyed expected international assignments to increase and to rely more on shorter duration assignments (extended business trips), short-term assignments and developmental/training assignments.
The survey also noted that income tax and immigration compliance provides the greatest challenge for mobile workforces.
At a recent travel risk management breakfast in Sydney hosted by Concur Technologies, this was reinforced with a guest speaker from KPMG referring to the GAPP survey noting that:
- 44% had no clear ownership of business travel compliance;
- 37% had no immigration risk and compliance process, and
- 70% had no assistance in place for those on assignment in the case of emergency evacuation.
Monitoring and compliance around varying tax, social security, immigration and employment laws is imperative, and if you have an internationally mobile workforce, it makes sense to build these areas into your overall travel risk management program.
Liam Brennan, Managing Director at GT Global Tracker (a global tracking service) believes “risks associated with tax and immigration breaches will be triggered on a daily basis”.
There are a number of areas to consider when it comes to global mobility and how you incorporate these areas into your overall travel risk management program:
- Ensure there is clear ownership of risk and compliance for those on assignment, and that there is collaboration between the travel, legal, finance and HR functions.
- Robust travel management data is key and can be used to mitigate risk and support compliance processes, using this data to identify who is on assignment where and for how long is a starting point. Work with your TMC and/or technology provider to build the relevant reports and analysis tools.
- Incorporate policies and procedures around tax and immigration risk and compliance with duty of care. Ensure these include the processes for assistance for both individual employees on assignment and lines of business during an emergency.
For more tips on what to consider when incorporating compliance into your program, take a look at this helpful blog.
If you are a travel management company (TMC), what data do you have that can assist your clients when it comes to identifying, mitigating and supporting their requirements around tax and immigration risk and compliance? How can you expand your current duty of care offerings to incorporate those other areas impacted by global mobility? And what conversations could you be having with your technology providers to add further value in this area? Food for thought?
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