In the Spotlight: Compliance & Compensation
International laws and tax regulations change frequently, creating potential risk and added administrative work to maintain compliance. Jennifer Patrona, Senior Vice President, Global Financial Operations provides insight into BGRS’s compensation services and tools to help mitigate risk when relocating global talent.
What are international tax treaties and why is it important global mobility leaders understand them?
Jennifer Patrona: International tax treaties, or totalization agreements, are specific agreements between two countries. Essentially, the agreement states that when employees temporarily relocate to, and work in, those two countries, they avoid double social security taxation of income. In other words, employees will not have to pay into the social system of the host country if that country has an agreement with the home country. In these ideal cases employees only contribute income tax to the system in which they plan to retire.
To ensure compliance and avoid double taxation, it is imperative an application is submitted for certificate of coverage in the home country before the employee goes on assignment. BGRS’s Certificate of Coverage Service assists clients in this regard. We can support them through the application, approval and renewal process. We ensure employees maintain eligibility and communicate regarding upcoming expiration throughout the process.
What are the benefits of utilizing BGRS’s Certificates of Coverage (COC) Services?
Jennifer: BGRS continues to increase the number of locations where we support our clients’ relocating populations. In response to our clients’ ongoing growth and expansion we decided to expand our certificates of coverage services for clients. Today, under the compensation services umbrella, we seamlessly facilitate the COC process, globally, for our clients.
Our integrated system, ReloAccess, consolidates each employee’s information into one single record, ensuring current certificates are maintained while employees are deployed. Employees and clients can access the information, see when applications were filed and approved, and when they are approaching expiration.
Additionally, our consultants function as single points of coordination for the life of the assignment. They will work with the employee to ensure we have all the documents necessary for the COC process. We also have alerts set up to proactively monitor certificates and facilitate extensions as needed. We inform clients of critical dates, upholding current certificates and international tax compliance.
Certificates of Coverage Services is just one part of Compensation Services, how does BGRS support clients to mitigate risk and maintain compliance?
Jennifer: BGRS understands the increasing challenge for compliance as international laws and regulations continue to become more stringent and complex. By entrusting BGRS with the entire financial piece of any relocation, including expense management and compensation services, our clients can have peace-of-mind. Our compensation team maintains a holistic record for each employee. This ensure we keep track of everything that’s happening financially on assignment so our clients don’t have to.
We have dedicated teams that work on our clients’ business in tandem with the client services teams. This collaborative and transparent structure creates a high level of client accountability and data integrity; in turn, ensuring compliance across the assignment. BGRS becomes the expert on the client company, the mobility policy, and the overall financial processes.
While we are not a tax provider, we make it easier for clients to work with their tax partners, especially at year-end. We collect and consolidate all required financial assignee data. This includes balance sheets, host country paid expenses and compensation into one report for each employee. With this one comprehensive record, BGRS can streamline processes and minimize the risk of errors.