April 22, 2020

COVID-19 – A Case for Action #4 Taking Stock of Stock

This is part of a special Global Mobility Tax client alert series – sharing stories and information we are encountering in these extraordinary times.

The COVID-19 global pandemic calls for quick action based on government directives in the interest of public health and safety. In this environment, arriving at practical mobility solutions can be challenging. Here’s how Global Mobility Tax has supported mobility programs in recent weeks :

 Action #4 Taxation of Stock, and so much more.

Recent new hire from India due to start work in the UK is now stuck in India and unable to move. The company does not have an entity in India.

Registration, Taxation and Payroll Issues –

• Working in India keeps employee subject to taxation in India;
• Future trailing liabilities for options that will be granted in India;
• Company reporting and withholding obligations in India;
• Corporate Permanent Establishment (PE) Issue for UK entity.

ACTION:    Global PEO to employ the individual temporarily; put a hold on stock issue prior to the final move to the UK to avoid trailing liabilities.

IMPACT:    The employee can start his new job working from home in India; employee will now be receiving salary in his work location.

SAVINGS:  Avoided costs of future stock administration, corporate registration, and long-term payroll administration in India.  Also avoided potential PE taxation at the corporate level in India, a country well known for its strict interpretation of PE laws.

We are here to provide you and your program with practical solutions, tax planning and optimization. 

Other Government Updates:

IRS TAX TIP 2020-42 – Coronavirus-related scams

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