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International taxation of Canadians relocated for overseas employment poses unique challenges to multi-national corporations. International tax systems are diverse, dynamic and as a result difficult to put in the context of the company’s existing international assignment policy.

CompassPOINTS™, our monthly e-newsletter, helps you to navigate this complex area by providing current information related to international assignment planning, expat taxation and containment of international assignment costs.

 
Previous Issues
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Year-End Assignment Tax Reminder February 2008
It is a certainty that immigration and tax departments communicate. With record numbers of Canadian foreign work visas being issued, a key focus for the CRA during 2008 will be the whole area of assignee taxation. If your company is conducting business in or staffing from the international arena, there are a number of important steps which should be taken to finalize 2007 assignee compensation and taxation reporting and prepare for 2008.
READ

Ka-ching, Ka-ching at the CRA: Ensuring Tax Balance in the Trend to Short Term Assignments
Recent trends have seen assignment managers planning more short term assignments. But what about the tax implications? Has assignment taxation been factored into the early stages of assignment planning? Proper assignment tax planning can significantly reduce overall assignment costs, and just as importantly, lack of it can sometimes nullify the savings from a shift to shorter term assignments.
READ

Helping You Help Your Employee Moving Overseas - The Importance of Expatriate Financial Planning
Recent trends have seen assignment managers planning more short term assignments. But what about the tax implications? Has assignment taxation been factored into the early stages of assignment planning? Proper assignment tax planning can significantly reduce overall assignment costs, and just as importantly, lack of it can sometimes nullify the savings from a shift to shorter term assignments.
READ

Tax Season 2006 Retrospective: Fixes for Next Year June 2007
It seems that there is always something that stands out during an expatriate tax reporting season that could be remedied for next year. What better time than the present to reflect, analyze amd implement changes that will ensure improvements for Tax Season 2007.
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Assignment Mexico: The Cultural Impact on Business Expectations June 2007
Understanding the Mexican culture is a critical first step in the process of establishing a business presence in Mexico. Are you an executive planning to conduct business in Mexico, and have you done your cultural homework?
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Pilot Flies Away from the CRA: Canadian Tax Residency (Part 2) March 2007
This month's feature drama highlights another Canadian pilot who had a happy ending to his tax residency dispute with the CRA. Message: help your expatriate employees to plan for their Canadian non-resident tax status.
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Newsflash: The CRA Unleashes Penalty Hurricane March 2007
International postal pipelines are seemingly clogged with penalty notices issued by the CRA to expatriate employees. How to help your internationally-bound employees to avoid penalty-mania...
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International Assignment Policy: Differing Expectations Across the Generations March 2007
Canadian employers, in a concerted effort to retain staff, are increasingly appealing to the generational differences in their workforce, and international assignments are a breeding ground for a generational mix. The challenge for employers is to ensure that these diverse expectations are met with delivered assignment policy.
READ

Regulation 105 Squabbles: Fallout from the Trend to Inbound Workers January 2007
Consultants to Canada are often not aware of Canadian tax responsibilities, and often, neither are the companies they provide services to, particularly when they are foreign-based but in Canada temporarily rendering services. Reg 105 withholdings can become a bone of contention unless handled properly.
READ

The Trailing Spouse: Key to Assignment Success January 2007
Often overlooked, but ironically one of the most significant determinants of international assignment success, the trailing spouse is typically a misunderstood factor in the assignment planning equation. "If mama ain't happy, ain't nobody happy". Faced with the risk of losing their investment in an assignee, savvy assignment managers are concentrating on the trailing spouse.
READ

Year-End Assignment Tax Reminder December 2006
If your company is conducting business in or staffing from the international arena, there are a number of important steps which should be taken to finalize 2006 assignee compensation and taxation reporting and prepare for 2007.
READ

Cross-Border Travel Alert for Assignees to the US December 2006
The US has just released the details of new entry travel requirements. What impact will this have on cross-border assignments and how will assignees to the US be affected?
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Helping Assignees to get their International Financial Affairs in Order December 2006
UK-based international investment banker Simon de Ferrer shares some tips and words of advice for assisting and encouraging international assignees in their financial house-cleaning.  Simon regularly travels to the Middle East to advise expatriate Canadian on financial matters.
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Canadian Tax Residency: An Expatriate Tax Horror Story November 2006
A recent decision on an appeal before the Canada Revenue Agency ("CRA") has left one Canadian expatriate (not a client of ours) wishing dearly that he'd checked out of Canada properly, and serves as an assignment planning lesson to employers sending assignees abroad.
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Inbound to Canada: The Assignee Perspective November 2006
Western Canadian companies are importing talent from abroad in record numbers. What is the inbound assignment experience like for the assignee, and how well are employers preparing these inpatriates for their assignment, particularly in one of the most complicated tax jurisdictions in the world?
READ

Inbound Workers: Staffing Solution, but Employer Beware October 2006
Calgary's severe labour shortage is forcing many multi-national corporations to look internationally for solutions to their staffing needs. While this is a positive solution, employers should carefully consider employment type alternatives for inbound workers, in anticipation of immigration, tax and legal issues.
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Assignee Death Overseas: Planning for an Unfortunate Possibility October 2006
Foreign Affairs and Trade Canada projects that approximately 1000 Canadians will have died in foreign countries during 2006, which points to the very real possibility that an assignee could die while living and working overseas. What assignment planning can be done to assist grieving families through such a wrenching experience?
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Taxpayer ID Numbers: An Organized Approach for US Assignments August 2006
United States taxpayer identification numbers are a confusing bunch, and when an element of confusion is entered into any assignment, productivity levels drop. EIN's ... SSN's ... ITIN's. If assignment managers find all of this bewildering, imagine how assignees feel. Effective Assignment Tax Programs, which include provisions to obtain these ID numbers for assignees and family members, can alleviate assignee stress and facilitate the roll-out of cross-border assignments.
READ

Destination Chile: Sending Assignees to South American Frontiers July 2006
South American countries are increasingly becoming common international assignment destinations. Foreign investors are being wooed by the Chilean government with tax incentives and liberal investment rules. Our focus on assignment planning for Chile is in response to this trend.
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Going International: Selecting the Right Employer Corporation June 2006
Planning is key to fully realizing the benefits of a business presence in a low tax regime, and optimizing corporate taxation in Canada. Conducting an Employer Corporation Review can be the first step to ensuring project feasability and a smooth transition to foreign soils.
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Overseas Employment Tax Credit: Putting Assignee Eligibility Angst to Rest June 2006
OETC eligibility guidelines are complex and a hot topic of discussion within international rotational workforces. Word travels quickly when significant tax savings are at stake. Thorough assignment tax planning can help to increase the likelihood that your assignees will meet OETC eligibility criteria and possibly be able to pocket the savings early.
READ

Regulation 105 Alert: Non-Resident Withholdings often Missed by Canadian Companies May 2006
Assignment managers bringing non-resident workers into Canada should ensure that they are very familiar with Regulation 105 withholding and reporting requirements. Revisions to this policy in 2005 clarified any ambiguity that previously existed, but also made the requirements more strict and created new burdens for non-residents working in Canada and those who pay for their services.
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Employer Report Card: The 2005 Tax Season in Review May 2006
How was your company's 2005 tax season ... really? We share with you some observations that could help to streamline the process for next year.
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Assignment USA: Sending Employees Cross-Border March 2006
With the increased flow of business between Canada and the United States, cross-border assignment planning has become somewhat laissez-faire. But the US is a foreign country and, given two of the most complex and well-administered tax jurisdictions in the world, the same amount of fervour that is expended on assignment planning for other international destinations should also be afforded to those which are cross-border.
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Minimizing Assignment Costs: 8 Key Guidelines for Assignment Managers March 2006
With their broad scope, urgency and inclusion of unfamiliar tax regulations, international assignments have potential to spiral out of control in terms of cost. Following eight key guidelines can help to contain costs and contribute to the overall success of the international business venture.
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Under the Radar: When Employees Work Overseas Undetected Jan 2006
Talented and mobile, they roam between international offices without a trace. The "Stealth Expatriate" is at first thought an enigma in today's workforce, yet according to a 2004 survey conducted by Cedant Mobility and Worldwide ERC, 78% of executives believe that these employees exist in their organizations. Tax and immigration risks arise for the company and these employees, and the task of accounting for all international assignees in an emergency situation becomes virtually impossible.
READ

Sending Assignees Abroad: Assignment Tax Programs are the Ticket to an Organized Departure Jan 2006
Prior to departure on an international assignment, a great deal of time is devoted by assignees to worrying about their assignment taxation. Typically this is a mystery to them, and they are keenly aware that it could adversely affect their pocketbook. The single-most effective way of assisting assignees through this preparation is with an Assignment Tax Program, which clearly lays out policies and provides answers to individual questions before they are asked.
READ

Warning! ... Your Assignees Could be Victims of International Tax Fraud Jan 2006
An actual account of an assignee's close brush with international tax fraud - what set off the alarm bells that the document resembling an IRS standard form was in fact fake.
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Assignment Tax Calendar 2005/2006: Avoiding an Avalanche of Tax Problems Dec 2005
In the face of increased CRA and IRS scrutiny, and a sharp increase in the number and severity of penalties for failure to meet reporting deadlines, it is important that companies plan now to follow the proper procedures in a timely fashion.
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Sourcing International Assignments: Mitigating the Risks of a Consultant-Laden Workplace Dec 2005
Calgary-based workforce planner Lynda Costello comments on the pitfalls of automatically placing overseas workers in consultant roles.
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Different Strokes for Different Folks: Relocation and the Generational Mixing of the Workforce Dec 2005
Once the decision has been made to relocate employees, the challenge is to make the move appealing to the assignees, and the key to this often differs based on the demographics of the group.
READ

Overseas Employment Tax Credit: Are Your Assignees Eligible? Nov 2005
Many multi-national corporations are not even aware that this substantial Canadian tax credit exists, or that their employees overseas may be eligible for it. Assignment costs can be minimized if the benefits arising from this tax credit are shared by the company and the assignee.
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Rotators vs In-Country Residents vs Short-Termers vs Consultants Nov 2005
Assignees are often mistakenly covered by a single, convenient international assignment policy. The result is an ill-fitting set of guidelines which leaves the assignee feeling frustrated and confused ... and physically far away from the answers.
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Reducing Assignment Costs: Online Education for Assignees' Children as an Alternative to Pricey Overseas Private Schools Nov 2005
An Alberta-based educational option for assignees' children overseas is turning heads as a means of significantly reducing assignment costs which can be escalated by exorbitant international private school fees. Cleverly using the internet as a vehicle for instruction, this alternative schooling also offers families flexibility overseas and easy repatriation to the Alberta school system.
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Assignment Glitches : Is Your International Relocation Planning Foolproof? Oct 2005
Complacency over the preparation of assignees for seemingly mundane relocation tasks carried out in the host country can result in reduced productivity. Assignees and multi-national employers share their experiences.
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Shattering Immigration Myths : Sending Canadian Assignees to the United States Oct 2005
Calgary immigration lawyer Veronica Choy debunks some common myths about sending Canadian assignees south of the border.
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Destination Mozambique: Sending Assignees to Obscure Places Sept 2005
Assignment managers often relocate employees to remote and far-off places, where information on host country taxation is difficult to obtain. Here we share our approach to gathering tax information for assignment planning in the context of a recent experience with a Canadian client's Mozambique business venture.
READ

Into the 21st Century: Assignment Documentation goes Online Sept 2005
Your company’s assignment documentation can now be made readily available to assignees anywhere in the world via the web. Imagine this. Expatriates can get immediate answers to international assignment-related questions, assignment policy is kept current through online updates, and assignment recruiting is aided by a corporate image of efficiency and organization.
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CRA to Pursue Canadian Multi-Nationals: Is Your Company Prepared for a Tax Audit? Sept 2005
A recent CRA announcement has Canadian multi-nationals wondering if they are ready for an inevitable tax audit, now that the CRA has a new mission to address aggressive international tax planning.  Will your company's business practices for dealing with foreign subsidiaries stand up to the scrutiny of the CRA's planned Centres of Expertise?
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The Assignee Primary Residence: Tax May Drive the Decision to Sell or Rent June 2005
The primary residence is the single most important investment that most people make.  Often, emotions are attached to the family home, and it is natural that impending international assignments should raise a certain amount of angst over the issue of selling versus renting. Personal goals, company policy and the housing market are always considerations, but often the decision comes down to the tax savings involved.
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Making the Right Selection: The Optimal Expatriate Personality Profile June 2005
A myriad of factors unique to international assignments complicate the selection process if the objective is to find truly suitable candidates. What do seasoned international workforce planners look for when sourcing assignments?  And how do they achieve this?.
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"Don't Worry, We Will Do the Paperwork Later": The Unpublished Relocation Policy June 2005
Many companies misguidedly procrastinate on documenting relocation policy, but failure to make the publication of this document a priority can translate to wasted company time and frustrated assignees who can’t find answers to their assignment questions.
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Social Security Taxes –
Assignment Planning for Success
May 2005
Social security tax is an oft-overlooked aspect of international assignment planning. Social security coverage in other parts of the world is expensive, yet maintaining ongoing CPP coverage can offer significant savings in assignment costs for both the assignee and the multi-national employer.
READ

Looking Back at the 2004 Tax Season
May 2005
April 30 has been torn from your desk calendar. Another Canadian tax deadline has passed. Did your assignees spend an inordinate amount of valuable company time trying to deal with and integrate their home and host country tax? Did you spend hours trying to answer difficult assignee tax questions? Can your assignment be made more attractive from a tax perspective to prospective assignees?
READ

Visiting Grandma –
Sending Assignees through the Electronic Curtain
May 2005
Once upon a time in the pastoral kingdom of Utopia, there lived a happy engineer with legendary moat-building prowess, who frequently crossed into the neighbouring kingdom as an expatriate worker. This international assignment fairy tale will strike a chord with assignment managers whose assignees face possible border detainments.
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Defending your Assignees Against the Tax Audit –
Some Winning Strategies
April 2005
The assignee tax audit can rear its head at any time during the year, as can a payroll tax audit. Anticipating and being prepared to defend against them can minimize stress, maintain productivity and contain assignment costs.
READ

Waving Goodbye to the CRA –
Becoming Non-Resident is Creating Problems for Canadian Assignees
April 2005
There has been a growing trend for th eCRA to not recognize non-residency claims, and this is causing widespread confusion. Many companies need to update their assignment tax policies to reflect this new CRA position.
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Sending Assignees to Brutopia –
CompassGUIDES HelpDesk Roadmap for one Assignment Manager
April 2005
One assignment manager's question to the CompassGUIDES HelpDesk, and the assignment planning response that we provided to her.
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Bringing Foreign-Based Consultants to Canada – Avoiding Tax Disputes March 2005
With the global marketplace currently a viable source for professional services, it is becoming increasingly common to find foreign-based consultants wandering the halls of Canadian companies.
READ

Flourishing Film Industry in BC –
Tax Considerations for Inbound Actors

March 2005
International film producers love British Columbia , spurring a film industry that injected, for example, an astounding $1.18 billion into the province in 2001.
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Flourishing Film Industry in Alberta –
Tax Considerations for Inbound Actors
March 2005
International film producers love Alberta, and no wonder. We offer sunny skies, spectacular vistas...
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Sending Employees Outside of Canada - The Tax Credit Mine Field February, 2005
That 80% of the Canadian income tax on the first $100,000 of wages earned can be eliminated is good news for internationally-assigned employees.
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Social Security Tax Nightmare February, 2005
Canada's new rules increase tax and assignment costs
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Tax Risk Management February, 2005
Tax Risk Managemnet and International Assignments in the Post-Enron Business Environment
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Where to Start? January 2004
The International Assignment Planning Dilemma
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Taxpayer Identification Numbers December 2004
Important Changes to Application Processes For Those Working, Conducting Business or Investing in the United States
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Sending Employees Across Borders November 2004
2004 Year-End Tax Review for International Assignment Program Managers with Canadian Companies
READ

Temporary Forced Family Repatriation October 2004
Canadian Tax Implications for Assignees and Companies Sending Employees Outside Canada
READ

Check back regularly for more articles.

 

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