Companies that send employees on extended international business trips and short-term international assignments face tax and immigration risks, according to a survey by KPMG's International Executive Services practice.
Eighty-eight percent of the 160 executives surveyed said these types of assignments create a compliance risk for companies. Ninety-three percent cited tax risks as the top area of concern, while 75 percent cited immigration risks. The visibility of these risks is murky for top executives. The CEO was aware of these risks at only 13 percent of the companies polled, while the CFO was aware of the risks at only 22 percent.
A third of the executives who responded to the survey said their company had already experienced tax or immigration compliance issues related to short-term international assignments of between six and 12 months or extended international business trips of between 30 and 180 days. Those risks could result in the deportation or incarceration of employees, as well as penalties against the companies.
Despite the risks, only 50 percent of the companies surveyed have a compliance framework around short-term international assignment risks, and 31 percent do not formally track the length of time that employees go on these assignments.
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