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1 BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company BDO KNOWLEDGE limited by guarantee, Webinar Series and forms Lifecycle part of the of an International Assignment international BDO network of independent member firms. Page

2 BDO KNOWLEDGE Webinar Series Lifecycle of an International Assignment Brad Veltkamp Senior Manager, Expatriate Tax Services BDO USA, LLP April 23, 2015 BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

3 CPE and Support CPE participation requirements to receive CPE credit for this webcast: You ll need to actively participate throughout the program. Be responsive to at least 75% of the participation pop-ups. Certificate of attendance: If you are logged in the entire time and respond to all participation pop-ups, you will be able to print your certificate from the Participation section at the end of the webcast. If you log out before printing your certificate: BDO USA professionals CPE will automatically be issued in CPE Tracking & Reporting. A copy of your certificate will be sent after you have been issued credit. All others will be ed instructions on how to access your certificate. Group participation to receive credit: Sign-in sheets must list a Proctor name and CPA license number. BDO USA professionals - submit your sign-in sheets using a Training & Development Request in BDO Service Now found at: BDOWorld > Applications & Resources > BDO Service Now > Click Request in the upper right menu, then chose Training & Development from the Filter Category drop-down, click on Training & Development Support. Page 3

4 CPE and Support (continued) Group participation to receive credit (continued): Clients and Contacts sign-in sheets to within 24 hours of the webcast. Alliance Members should proctor their own group participants. This process is detailed in the LearnLive Participant Guide, which can be found by searching LearnLive Participant Guide on the Alliance Portal. Call LearnLive Support below for questions. Unfortunately, we cannot currently support group CPE for International Firms. Those wanting CPE must register and log in on their own computer. Q&A: Submit all questions using the Q&A feature on the lower right corner of the screen. The presenter(s) will review and answer all questions submitted. Technical Support: If you should have technical issues, please contact LearnLive: Click on the Live Chat icon under the Support tab, OR Call: Page 4

5 With You Today Brad Veltkamp Senior Manager Expatriate Tax Services BDO USA, LLP 1001 Morehead Square Drive Suite 300 Charlotte, NC Direct: (704) Page 5

6 Lifecycle of an International Assignment Does your idea of sending an employee on an international assignment look like this? Page 6

7 Lifecycle of an International Assignment Just beam them over!!! Page 7

8 Lifecycle of an International Assignment Probably not! Chances are that you put in a lot more thought and coordination. Page 8

9 Agenda What is an international assignment? Lifecycle of International Assignment Pre-assignment planning Assignment initiation Ongoing support Repatriation Post-assignment planning What is each of these steps? Why are they important? Who does what? How can BDO help? Page 9

10 What is an International Assignment? Typically this means that you are being sent to another country on behalf of your current (or maybe intended) employer for a set period of time. Most assignments are temporary in nature versus a permanent relocation Assignments can take on a multitude of forms: Long-term assignments (typically 2 3 years) Short-term assignments (typically less than 12 months) Extended assignments (5 years or more) Back and forth (frequent travel to/from fixed bases) Project based (in specific location for duration of project then either back home or to another project) Why does a company choose to send someone on assignment? Specific need in host country Talent development Individual requested Page 10

11 International Assignment Lifecycle Wheel Page 11

12 Pre-Assignment Planning What is it? Why is it important Company Responsibilities Assignee Perspective How can BDO help? Page 12

13 Pre-Assignment Planning What is it? Good pre-assignment is key to a successful assignment for the company and the individual Planning should focus on the following: Identification of assignee Talent planning, role definition, cultural differences and ability to overcome Type of assignment Long-term, short-term, permanent Tax equalized versus On Your Own Cost saving opportunities How are you going to deliver compensation? Assignment structure Who is going to employ the individual home entity or host entity? What benefits will the individual retain? Page 13

14 Pre-Assignment Planning Why is it important? Without proper planning, an assignment can end up costing the company significantly more than anticipated Choosing the wrong candidate can lead to need to bring individual home early and could reduce morale in host location In worst case scenario, what happens if individual needs to be terminated or otherwise leaves? What termination plan and/or employment law covers the company and individual? Page 14

15 Pre-Assignment Planning Responsibilities Company Responsibilities Develop a strategy for determining top candidates for assignments that incorporate key company strategies for talent growth Create an assignment policy (or multiple assignment policies) that outline specific benefits and treatments to ensure consistency throughout organization Assignee Responsibilities Read all documentation and ask all questions Discuss at length with friends and family and ensure everyone is fully committed to the assignment before signing an agreement Page 15

16 Pre-Assignment Planning How can BDO help? We can help by reviewing current company policies and/or creating new assignment policies We can provide benchmark data from companies within similar industry and/or size to determine competiveness of policies We can perform cost projections to help properly plan and budget including cost comparisons of what-if scenarios Page 16

17 Assignment Initiation What is it? Why is it important Company Responsibilities Assignee Perspective How can BDO help? Page 17

18 Assignment Initiation What is it? Now that the individual has been chosen, it s time to get them to the host location. Assignment initiation includes: Final move / flights to host location and shipment of household goods Temporary living arrangements in home and host location Cultural training / language lessons for employee and family Getting settled in host location Who will show assignee around the town to familiarize themselves with the location? Is the host office ready to receive the new individual (phone, computer, etc.) Overview of tax considerations Page 18

19 Assignment Initiation Why is it important? The likelihood of success will be greatly increased when the assignee feels completely supported from day 1. In the initiation phase, the little things matter a lot: Being able to connect to the internet and having a phone go a long way Getting payroll set up correctly the first time around so individual doesn t have to worry about when and how they are being paid Assignee being able to understand what he is responsible for in terms of taxation from day 1 Page 19

20 Assignment Initiation Responsibilities Company Responsibilities Have a plan! There are a lot of moving pieces during the initiation phase and a lot of items that need to be done in a specific order Identify an individual or team who will oversee the step by step process of setting the new assignee up correctly in the host location Assignee Responsibilities Get to the host location Comply with all internal deadlines to make sure things run smoothly Page 20

21 Assignment Initiation How can BDO help? At the time of initiation, the most important service BDO can offer is the predeparture/arrival tax consultations Whether the individual is tax equalized or not, it is imperative that they understand the tax situation in the home and host location as they move BDO can also assist the company with various individual and corporate registration requirements including: Application for tax id numbers Filing Certificate of Coverages Registration set up of payroll (especially shadow payrolls) Page 21

22 Annual Ongoing Support What is it? Why is it important Company Responsibilities Assignee Perspective How can BDO help? Page 22

23 Annual Ongoing Support What is it? Now that the individual is on assignment, just need to make sure that everything stays on track Always recommended to check in with assignee on regular basis (a couple of times a year) to make sure assignee has what is needed Are current accommodations what was expected/needed? How is family transitioning? Any changes/modifications needed due to unexpected issues? Monitor payroll activity to ensure proper reporting and distributions Provide ongoing tax support including annual tax preparation Page 23

24 Annual Ongoing Support Why is it important? As part of the company s talent management strategy, if assignee was chosen because of career growth opportunities, you do not want the assignee to feel lost or forgotten Ensure the company is staying in compliance with payroll requirements globally to avoid issues If tax equalized, want to ensure that there is a reconciliation of all taxes paid during the year so assignee is paying their fair portion of total tax cost Page 24

25 Annual Ongoing Support Responsibilities Company Responsibilities Make sure payroll reporting is handled correctly Identify contact person who will can help assignee with issues in the host location Assignee Responsibilities Communicate, communicate, communicate If being provided with tax return assistance, ensure complying with all deadlines to avoid unnecessary penalties and interest Page 25

26 Annual Ongoing Support How can BDO help? We can help review global payrolls to ensure that the assignment compensation is being correctly reported in home and/or host location (recommended at least quarterly) Perform gross up calculations to pre-fund the expected company liability Global tax compliance we will review everyone s facts and circumstances to determine where an individual is required to file and help make the process as easy as possible for the individual Tax Settlement Calculation whether equalized or not, there is often items in the individual s compensation that they are not going to be responsible for tax on. We can ensure a detailed calculation is performed along side the return to allocate the tax between individual and company and make sure company is not overspending on global tax expenses Page 26

27 End of Assignment Planning What is it? Why is it important Company Responsibilities Assignee Perspective How can BDO help? Page 27

28 End of Assignment Planning What is it? This is often an area that is forgotten about or not done at all Planning for the end of assignment should start as soon as the assignee is first identified for the assignment What role will assignee return back to his/her previous role or an expanded role? Will individual stay in the host location? What happens with individual who took over the previous role? Who takes over in the host location upon end of assignment is company looking to groom someone local for the position or will another assignment be necessary? Page 28

29 End of Assignment Planning Why is it important? Often just as important as pre-assignment planning, planning for the end of the assignment early can lead to much higher ROI (return on investment) related to the assignment Failure to plan for the return of the assignee often leads to dissatisfaction on part of not only the assignee, but others whose roles/growth are interrupted and could lead to people leaving for the competition Page 29

30 End of Assignment Planning Responsibilities Company Responsibilities Ensure proper role/talent planning is done in advance Communicate with those affected at least 6 months in advance of transfer to start laying the groundwork for the return Communicate with responsible third parties to ensure all immigration and other deregistration activity is coordinated. Assignee responsibilities Plan your own career. Take time to assess what you have accomplished on the assignment; review your goals as you come home; where are you expecting to be in a few years? Page 30

31 End of Assignment Planning How can BDO help? At the time of repatriation/localization, the most important service BDO can offer is the tax consultation. How will things change now that the assignment is over? What happens to lingering assignment benefit payments or left over Foreign Tax Credits? BDO can also assist the company with various individual and corporate de-registration requirements including: Departure tax returns De-registration of payrolls (if needed) Application for clearance certificates Page 31

32 Post-Assignment Planning What is it? Why is it important Company Responsibilities Assignee Perspective How can BDO help? Page 32

33 Post-Assignment Planning What is it? This is a chance to review how the full assignment process worked. Work with the repatriated or localized assignee to gather feedback about the process and policies and adapt as necessary: Should changes to the policy be implemented? What processes worked and didn t work? Are these changes needed for a specific location or the overall program? Use the experience of the recently repatriate individual to help in the determination of next assignees. Have them share their experiences with potential targeted employees Page 33

34 Post-Assignment Planning Why is it important? A company s policies and processes should always be a living document. Keeping a view on the future will ensure your company is providing the most cost-efficient and competitive assignment packages Utilizing feedback from past assignees allows the individual to feel involved and a part of the company overall. It can help foster loyalty with the employee Past assignees are the voice of your program. Their experience will pave the success of future assignments. Page 34

35 Post-Assignment Planning Responsibilities Company Responsibilities Ensure a process exists to capture feedback Create a routine to periodically review program policies and ensure still meeting company goals (i.e. has company moved focus from talent development to a more costsavings view) Compare program to others in market to remain competitive Assignee Responsibilities Provide honest feedback Be supportive in any change process to encourage future developments Page 35

36 Post-Assignment Planning How can BDO help? Similar to Pre-Assignment stage: Market analysis including benchmarking of policies Overall policy review including cost analysis and comparisons Process identification, documentation and review Page 36

37 International Assignment Lifecycle Wheel Page 37

38 In Summary Sending an employee on an international assignment is a long term commitment by both the company and the individual (and family). It should not be entered into lightly and for best success, communication throughout the process is key. Proper planning and partnership with key 3rd party vendors can help reduce company s exposure to unplanned cost overages Page 38

39 Questions? Page 39

40 Conclusion Thank you for your participation! Certificate Availability: If you participated the entire time and responded to at least 75% of the participation pop-ups, click the Participation button below to access the print certificate button. Group Participation Reminder to receive credit: Sign-in sheets must list a Proctor name and CPA license number. BDO USA professionals - submit your sign-in sheets using a Training & Development Request in BDO Service Now found at: BDOWorld > Applications & Resources > BDO Service Now > Click Request in the upper right menu, then chose Training & Development from the Filter Category drop-down, click on Training & Development Support. Clients and Contacts sign-in sheets to cpe@bdo.com within 24 hours of the webcast. Alliance Members should proctor their own group participants. This process is detailed in the LearnLive Participant Guide on Alliance Portal > Resource Center. Call LearnLive Support for questions at Unfortunately, we cannot currently support group CPE for International Firms. Those wanting CPE must have registered and participated from their own computer. Please exit the course by clicking on the red X in the upper right corner. Page 40

41 SPEAKER BIOGRAPHIES Page 41

Biography Brad Veltkamp Senior Manager Expatriate Tax Services BDO USA, LLP 1001 Morehead Square Drive Suite 300 Charlotte, NC 28203 Direct: (704) 887-4107 bveltkamp@bdo.

42 Biography Brad Veltkamp Senior Manager Expatriate Tax Services BDO USA, LLP 1001 Morehead Square Drive Suite 300 Charlotte, NC Direct: (704) EXPERIENCE SUMMARY Bradley Veltkamp, Senior Manager, BDO-Charlotte, has been providing expatriate compliance and consulting for over 17 years across multiple industries, with the last 13 years focusing on clients in the financial sector. Brad has helped clients in a broad spectrum of compliance and consulting related to expatriates, including international tax, expatriate policy considerations and international payroll regulations. Prior to joining BDO, Brad started his career in expatriate management through one of the Big 4 firms before moving in-house to help run a global mobility program at a large financial institution. Brad is now focused on helping his clients reduce their global tax risk through reviewing current processes and enhancing opportunities to achieve optimal compliance levels. Page 42 EDUCATION B. Comm, Accounting, University of Saskatchewan Licensed CPA (SC)

43 BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 58 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,328 offices in 152 countries. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your firm s individual needs BDO USA, LLP. All rights reserved. Page 43

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