Session 7 international tax and compensation steve rao
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This PPT was session 7 at the INSZoom Immigration Conference 2015 in Bengaluru. The session was presented by Stephen Rao of Sapient Corporation.
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Session 7 international tax and compensation steve rao
- 1. INSZOOM Immigration Conference 2015 Empower Employees for Immigration Compliance
- 2. • Stephen Rao currently works for Sapient in Gurgaon, India. He is a Director – Regional Mobility Team (India & APAC). About the Author: Stephen Rao
- 6. Assignment Types Host Country Payroll •The assignee’s payroll becomes inactive in the home country and becomes active in the host country. Home country payroll •The assignee remains on the home country payroll. Host country entity may create a shadow payroll for tax and social security filing obligations Split pay Model •The assignee get a part of the payroll in home country and gets assignment allowances in the host country
- 7. Residency Taxable Income Domestic Tax Laws Income Tax Treaties Basics for understanding Income tax
- 8. Panel Discussion Exposure due to Business Travelers and Short Term Assignments – Sruthi Ananthachari Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 – Amarpal Singh Social Security Tax – Exposure to corporate entities – Ravi Jain Income tax processing and FBAR – Karthikeyan Gangadharan
- 9. Exposure due to Business Travelers and Short Term Assignments Sruthi Ananthachari
- 10. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 Amarpal Singh
- 11. Social Security Tax Ravi Jain
- 12. Income tax processing and Foreign Bank and Financial Records Karthikeyan Gangadharan
- 15. Resident For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation, or any other criterion of a similar nature, and also includes that State and any political subdivision thereof.
- 16. Resident in 2 Countries Treaty tie breaker article Simplified extract of Treaty Tie Breaker Article Where by reason of the provisions of paragraph 1 of this Article, an individual is a resident of both countries, then his status shall be determined as follows: •he shall be deemed to be a resident in the country in which he has a permanent home available to him; if he has a permanent home available to him in both countries, he shall be deemed to be a resident only of the country with which his personal and economic relations are closer (centre of vital interests); •if the country in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either country, he shall be deemed to be a resident only of the country in which he has an habitual abode; •if he has an habitual abode in both countries or in neither of them, he shall be deemed to be a resident only of the country of which he is a national; •if he is a national of both countries or of neither of them, the competent authorities of the both countries shall settle the question by mutual agreement.
- 17. Tax Residency and Taxability • Generally taxable on the worldwide income Tax Residents • Generally taxable on income from specific source Tax Non-Residents • Employment Income • Personal Income (eg. Interest, Dividend, capital Gain) • Deferred Income (eg. Pension, Gratuity, Equity, e Tax Residency status impacts the taxation of an expatriate
- 18. Compensation wage elements Stay At Home Compensation may include: •Basic Salary/Wages •Special Allowances •Bonus •Deferred compensation •Stock options/Share awards •Group term life insurance •Education Allowance Assignment Compensation : •Cost of living allowance •Housing •Family allowance •Tax reimbursements •Tax preparation fees •Hypothetical tax •Home leave / Flyback •Foreign service premium •Foreign taxes •Relocation allowance
- 19. •Time Basis: compensation other than fringe benefits •Geographical Basis: certain listed fringe benefits •Alternative Basis: facts and circumstances Sourcing of income Time Basis Base salary Vacation pay Incentive awards Stock option income (special rules) Flexible compensation Reimbursed club dues for a U.S. club membership Geographical Basis Housing: Education: Local transportation: Foreign Tax reimbursements: US Tax reimbursements: Hardship duty pay: Moving expenses: Cost of Living Allowance Alternative Basis Where income may be taxed on receipt basis- India Deemed disposition of Capital Asset
- 20. Dependent Personal Services Article Generally, personal services income is treaty exempt if the employee is in the host country : for 183 days or less, and Is not paid by an establishment in the host country, and The compensation is not borne by a Permanent Establishment in the host country
- 21. • John Stephen Rao Sapient Corporation Sector 21 Gurgaon, Haryana 122016, INDIA +91 124 4167271 T +91 97111 89970 M srao21@sapient.com • INSZoom.com, Inc. 2603 Camino Ramon, Suite 375 San Ramon, California 94583 USA 925 244 0600 T Sales@inszoom.com Contact Info: