Overview Companies that operate global share plans face challenges involving differing payroll, reporting and withholding obligations from country to country. In cases where internationally mobile employees participate in employee share plans and cash based incentive plans the challenge is magnified, as multiple tax obligations may arise in a number of different jurisdictions. Calculations to determine appropriate tax withholdings can be complex, costly and time-consuming. Tax authorities globally are aware that employers struggle with compliance in this area and it has become a focus for tax authority investigation. In this environment, companies may wish to consider how they introduce new efficiencies to existing processes. This can help to enhance compliance and governance at the same time as minimising cost.
What should you be aware of? Companies managing global share plans will be aware that tax and social security obligations can vary significantly from country to country. There can be differing tax points and legislation governing the payment and some countries have strict payroll requirements, as well as annual reporting obligations. Companies offering global share plans need to ensure that they are aware of relevant tax and legal obligations on their share plans in each jurisdiction in which there are participants.
Making Equity Work Managing Global Equity
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