Tax Equalization
Tax Equalization
Tax equalization is basically nothing more than a tax balancing calculation that allows employees to receive no more, but also no less net income during their international assignment than would be the case if they had not gone abroad.
With tax equalization, the additional tax burden is borne by the company. On the other hand, if the tax burden is lower during the international assignment, the company gets to enjoy the tax advantages.
Companies utilize tax equalization in order to ensure that all international assignments are just as fair and transparent for all employees. Unlike tax protection, in which only the additional burden is borne by the company and any tax advantages are enjoyed by the employees themselves, tax equalization results in there being no more attractive (e.g. Dubai or Russia) or less attractive (e.g. Germany or Austria) assignment destinations from a tax-related perspective.
CONVINUS regularly compiles tax equalization calculations for a wide range of country combinations for a large number of clients from numerous industries. Your tax equalization calculations and other tax equalization concerns are in good hands with us.
Our key consulting services:
- Worldwide calculations of tax burdens based on the personal living situation of the employee
- Calculation of tax equalizations for international assignments of employees
- Tax reconciliations at the end of the year and/or at the end of the overseas posting
- Tax equalization calculations for determining fair and transparent remuneration for international assignments
BEST PRACTICES - A small selection of cases from our day-to-day work:
- Calculation of tax equalizations as part of balance sheet calculations for a posting from Switzerland to Austria
- Compilation of annual tax equalizations and tax reconciliations for a CEO employed locally in Singapore with a net compensation agreement
- Implementation of tax equalization policies in international assignment guidelines
- Calculation of tax equalizations for international assignments of US citizens from Switzerland to China
