Global Mobility: International Assignments from Germany - Policy Considerations

The following article provides a high level and general overview of some of the more important considerations for employers when designing and creating an international assignment policy for German employees working overseas.

Employee mobilisations and the policies and guidelines that govern these mobilisations are a complex issue where careful and precise consideration should be taken in respect of the terms and conditions documented in any policy.

International assignment or global mobility policies have evolved in many ways in recent years, however one fundamental and unshakeable rule remains – the international mobilization should be planned efficiently, effectively and in a timely manner to ensure all aspects of the international mobilization create a seamless and smooth an experience as possible for both the internationally mobile employee and the employer.

This article considers some of the latest trends when employers are considering mobilising a German employee to an overseas location.

Company Assignment Policy

A robust and fit for purpose international assignment policy should be designed and created having considered the following points:

  • Both the financial terms and conditions and the support to be provided to the employee should be considered and clearly documented in the policy.
  • The assignment guidelines should be clear and concise and all stakeholder’s roles and responsibilities during the lifecycle of the international assignment should be clearly documented.
  • Assignment specific “benefits”, which are an intrinsic component of an international assignment policy, could include flexible elements. For example, assistance with buying a car could be a core point, but instead of a direct reimbursement of costs, a lump-sum could be provided.
  • Overly flexible assignment policies can often be very expensive for the employer whilst being very attractive to the employee therefore a careful balance should be struck between incentivising the employee to undertake the international assignment and the financial cost to the employer.
  • This may be an obvious statement but not all host locations are the same therefore the assignment policy should have the ability to flex depending on a variety of factors including the host location. A German employee mobilised to London will almost certainly require a different compensation package than an employee mobilized to Nairobi.

International Assignment Compensation

It is extremely important that International assignment compensation (both cash payments and non-cash benefits) are calculated accurately and subject to the appropriate German income tax and/or social security withholdings.

In Germany, income tax exemption always has priority over social security contribution exemption. This means that, other than in very specific circumstances, a compensation component is only social security exempt if it is firstly exempt from German income tax. To ensure compliance, and avoid potential financial penalties, read our detailed guide to Germany’s tax rules and regulations .

Noted below are some of the most common International assignment compensation components and the German income tax and social security treatment of such compensation.

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International assignment of foreign employees to Germany

Registration and taxes.

When posting employees from abroad to Germany, it is often ignored that these employees require a German tax ID number before starting work. In order to be able to perform a payroll run for these employees with the most favorable income tax deduction for them, the deduction characteristics for income tax (formerly tax class – now ELStAM) are required in addition to this tax ID number.

If these details are not available, the employee must be accounted for according to the most unfavorable tax class, which leads to a tax burden of about 50%. The employee then often lacks liquidity and will complain to his employer. If the tax number or the deduction characteristics are subsequently made available, it is no longer possible to correct the payroll and the overpaid income tax can only be reclaimed by the employee in the following year within the framework of an income tax assessment.

Visa and work permit

It should also be noted that in the case of posting from third countries (not EU or EEA countries), a work permit and a visa must be applied for in good time beforehand. If employment is taken up despite the lack of a work permit, it is illegal work and both the employee and the employer can be prosecuted. A deportation of the employee can be the result.

Social security

If the activity in Germany does not exceed five years and contributions are paid into the German pension insurance, the foreigner is not entitled to benefits from the pension fund (old-age pension). Contributions paid in can then be reclaimed with an application. This should not be forgotten.

If there is a social insurance agreement between Germany and the foreign country, the foreign employee can be exempted from the German social insurance obligation by presenting an A1 certificate from the social insurance institution in his or her home country. In this case, however, the employee should check whether the health insurance cover of his or her home country also covers the medical expenses in Germany. If not, a corresponding supplementary health insurance would have to be taken out for Germany.

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Posting workers to Germany

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Directives 96/71/EC, 2014/67/EU and 2018/957/EU set out the guidelines related to the posting of workers to EU. Rather than a single transposition, the secondment of employees to Germany is based on 3 frameworks acts, the Minimum Wage Act ( Mindestlohngesetz – MiLoG ), the Posted Workers Act ( Arbeitnehmer-Entsendegesetz – AEntG ) and the Act on the Provision of Temporary Workers ( AÜG) .

In the following sections we summarize the obligations provided by German and European Law on transnational posting to Germany.

For an overview of all EU Directives on the matter, take a look at our guide on EU Posted Workers Directives.

Preliminary obligations for posting workers to Germany

When posting workers to Germany, foreign-domiciled employers must comply with several rules concerning minimum wage and employment conditions in order to give notification of their posted workers. These conditions are laid down in collective bargaining agreements and legal provisions and must be reported in the notification pursuant to the Minimum Wage Act.

As a matter of fact, in order to comply with these rules, employers must submit the notification of posting online with the help of the minimum wage registration portal .

It has to be noted that notifications must be submitted prior to the commencement of the work activity in Germany regardless of its duration.

Exceptions to the obligation to notify the posting of workers to Germany

The obligation to notify only applies to specific work activities, as listed in Article 2a of the Schwarzarbeitbekämpfungsgesetz:

  • setting up and dismantling trade fairs and exhibitions;
  • building industry;
  • meat industry;
  • catering and hotel business;
  • industrial cleaning;
  • passenger transportation industry;
  • fairground and amusement sector;
  • haulage, transport, and associated logistics industry;
  • private security sector;

Furthermore, pursuant to the Minimum Wage Act, notifications are not required when an employee regular monthly pay exceeds a gross €2,000. In this case, the employer must submit evidence of such payment for the past 12 months.

However, considered that the obligation to notify is based on the legislation provided by three different acts, as stated before MiLoG, AEntG and AÜG, we recommend a specific analysis of every case.

Working and salary conditions applicable during the posting to Germany

The above-mentioned 3 acts lay down certain minimum requirements for the terms and conditions of employment. General conditions of employment apply to every sector and concern working time, safety, health and hygiene in the workplace, further remuneration, allowances, reimbursement, holiday pay and vacation allowance, among others.

As far as the minimum wage is concerned, this value is adjusted every 6 months, on January 1 st and on July 1 st .

Currently, the minimum pay in Germany amounts to gross €10.45 per hour worked.

Regarding applicable salary conditions applicable when posting of workers in Germany from Italy, the Italian Revenue Agency, with ruling no. 428 of 12 September 2023, clarifies the request of a commercial company regarding the possible applicability of the conventional regime to one of its employees seconded to Germany from 1 January 1st, 2022 until December 31st, 2023 at a German subsidiary.

Assignments to Germany lasting more than 12 months

From 30 July 2020, in case of posting employees to Germany for more than 12 months, additional rules shall apply. These regulations apply starting from the date from which the posting of a worker exceeds a duration of 12 months.

However, this period can be extended up to 18 months by adjoining a statement of reasons to the submitted notification.

Special rules applicable to the posting of temporary workers to Germany

Concerning the use and supply of temporary work services, special rules apply to ensure the protection of posted workers. Under this framework, the supplier must comply with the supplier’s assurance, a written form that certifies the conditions of employment pursuant to German legislation are observed.

Social security in Germany

When posting workers to Germany, employees temporarily work in Germany but are employed in another country. Thanks to the EU harmonized social insurance system, employees posted abroad pay social insurance contributions to the country where they are employed.

As a matter of fact, pursuant to Regulation (EC) 883/2004, the posting company must apply to the competent social institution for the issuing of an A1 Certificate for each posted workers. This document states in which country the holder pays for social security contributions.

A&P can provide full support with the application for the A1 certificate or the multistate A1 Certificate.

Documents’ availability during the posting to Germany

When posting workers to Germany, your company and your employees must fully cooperate with the German authorities in case of a customs inspection.

Among others, the main documents requested during such inspections are personal IDs, work permits (when applicable), employment contracts, pay slips, evidence of wage payments made, evidence of working time.

All these documents must be available on German territory and written in German language. When requested, they must be provided to the authorities. Failure to cooperate may result in an administrative offence.

Penalties for non-compliance as defined in the German legislation

If foreign-domiciled employers fail to notify or incorrectly notify the posting of workers to Germany, or fail to provide posted workers minimum working conditions, they are committing a violation.

This is punishable as administrative offences entailing a fine amounting to a maximum of €30,000 pursuant to Art. 21 MiLoG, Art. 23 AEntG, Art. 16 AÜG.

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Managing International Assignments

International assignment management is one of the hardest areas for HR professionals to master—and one of the most costly. The expense of a three-year international assignment can cost millions, yet many organizations fail to get it right. Despite their significant investments in international assignments, companies still report a 42 percent failure rate in these assignments. 1

With so much at risk, global organizations must invest in upfront and ongoing programs that will make international assignments successful. Selecting the right person, preparing the expatriate (expat) and the family, measuring the employee's performance from afar, and repatriating the individual at the end of an assignment require a well-planned, well-managed program. Knowing what to expect from start to finish as well as having some tools to work with can help minimize the risk.

Business Case

As more companies expand globally, they are also increasing international assignments and relying on expatriates to manage their global operations. According to KPMG's 2021 Global Assignment Policies and Practices Survey, all responding multinational organizations offered long-term assignments (typically one to five years), 88 percent offered short-term assignments (typically defined as less than 12 months), and 69 percent offered permanent transfer/indefinite length.

Managing tax and tax compliance, cost containment and managing exceptions remain the three principal challenges in long-term assignment management according to a 2020 Mercer report. 2

Identifying the Need for International Assignment

Typical reasons for an international assignment include the following:

  • Filling a need in an existing operation.
  • Transferring technology or knowledge to a worksite (or to a client's worksite).
  • Developing an individual's career through challenging tasks in an international setting.
  • Analyzing the market to see whether the company's products or services will attract clients and users.
  • Launching a new product or service.

The goal of the international assignment will determine the assignment's length and help identify potential candidates. See Structuring Expatriate Assignments and the Value of Secondment and Develop Future Leaders with Rotational Programs .

Selection Process

Determining the purpose and goals for an international assignment will help guide the selection process. A technical person may be best suited for transferring technology, whereas a sales executive may be most effective launching a new product or service.

Traditionally, organizations have relied on technical, job-related skills as the main criteria for selecting candidates for overseas assignments, but assessing global mindset is equally, if not more, important for successful assignments. This is especially true given that international assignments are increasingly key components of leadership and employee development.

To a great extent, the success of every expatriate in achieving the company's goals in the host country hinges on that person's ability to influence individuals, groups and organizations that have a different cultural perspective.

Interviews with senior executives from various industries, sponsored by the Worldwide ERC Foundation, reveal that in the compressed time frame of an international assignment, expatriates have little opportunity to learn as they go, so they must be prepared before they arrive. Therefore, employers must ensure that the screening process for potential expatriates includes an assessment of their global mindset.

The research points to three major attributes of successful expatriates:

  • Intellectual capital. Knowledge, skills, understanding and cognitive complexity.
  • Psychological capital. The ability to function successfully in the host country through internal acceptance of different cultures and a strong desire to learn from new experiences.
  • Social capital. The ability to build trusting relationships with local stakeholders, whether they are employees, supply chain partners or customers.

According to Global HR Consultant Caroline Kersten, it is generally understood that global leadership differs significantly from domestic leadership and that, as a result, expatriates need to be equipped with competencies that will help them succeed in an international environment. Commonly accepted global leadership competencies, for both male and female global leaders, include cultural awareness, open-mindedness and flexibility.

In particular, expatriates need to possess a number of vital characteristics to perform successfully on assignment. Among the necessary traits are the following:

  • Confidence and self-reliance: independence; perseverance; work ethic.
  • Flexibility and problem-solving skills: resilience; adaptability; ability to deal with ambiguity.
  • Tolerance and interpersonal skills: social sensitivity; observational capability; listening skills; communication skills.
  • Skill at handling and initiating change: personal drivers and anchors; willingness to take risks.

Trends in international assignment show an increase in the younger generation's interest and placement in global assignments. Experts also call for a need to increase female expatriates due to the expected leadership shortage and the value employers find in mixed gender leadership teams. See Viewpoint: How to Break Through the 'Mobility Ceiling' .

Employers can elicit relevant information on assignment successes and challenges by means of targeted interview questions with career expatriates, such as the following:

  • How many expatriate assignments have you completed?
  • What are the main reasons why you chose to accept your previous expatriate assignments?
  • What difficulties did you experience adjusting to previous international assignments? How did you overcome them?
  • On your last assignment, what factors made your adjustment to the new environment easier?
  • What experiences made interacting with the locals easier?
  • Please describe what success or failure means to you when referring to an expatriate assignment.
  • Was the success or failure of your assignments measured by your employers? If so, how did they measure it?
  • During your last international assignment, do you recall when you realized your situation was a success or a failure? How did you come to that determination?
  • Why do you wish to be assigned an international position?

Securing Visas

Once an individual is chosen for an assignment, the organization needs to move quickly to secure the necessary visas. Requirements and processing times vary by country. Employers should start by contacting the host country's consulate or embassy for information on visa requirements. See Websites of U.S. Embassies, Consulates, and Diplomatic Missions .

Following is a list of generic visa types that may be required depending on the nature of business to be conducted in a particular country:

  • A work permit authorizes paid employment in a country.
  • A work visa authorizes entry into a country to take up paid employment.
  • A dependent visa permits family members to accompany or join employees in the country of assignment.
  • A multiple-entry visa permits multiple entries into a country.

Preparing for the Assignment

An international assignment agreement that outlines the specifics of the assignment and documents agreement by the employer and the expatriate is necessary. Topics typically covered include:

  • Location of the assignment.
  • Length of the assignment, including renewal and trial periods, if offered.
  • Costs paid by the company (e.g., assignment preparation costs, moving costs for household goods, airfare, housing, school costs, transportation costs while in country, home country visits and security).
  • Base salary and any incentives or allowances offered.
  • Employee's responsibilities and goals.
  • Employment taxes.
  • Steps to take in the event the assignment is not working for either the employee or the employer.
  • Repatriation.
  • Safety and security measures (e.g., emergency evacuation procedures, hazards).

Expatriates may find the reality of foreign housing very different from expectations, particularly in host locations considered to be hardship assignments. Expats will find—depending on the degree of difficulty, hardship or danger—that housing options can range from spacious accommodations in a luxury apartment building to company compounds with dogs and armed guards. See Workers Deal with Affordable Housing Shortages in Dubai and Cairo .

Expats may also have to contend with more mundane housing challenges, such as shortages of suitable housing, faulty structures and unreliable utility services. Analyses of local conditions are available from a variety of sources. For example, Mercer produces Location Evaluation Reports, available for a fee, that evaluate levels of hardship for 14 factors, including housing, in more than 135 locations.

Although many employers acknowledge the necessity for thorough preparation, they often associate this element solely with the assignee, forgetting the other key parties involved in an assignment such as the employee's family, work team and manager.

The expatriate

Consider these points in relation to the assignee:

  • Does the employee have a solid grasp of the job to be done and the goals established for that position?
  • Does the employee understand the compensation and benefits package?
  • Has the employee had access to cultural training and language instruction, no matter how similar the host culture may be?
  • Is the employee receiving relocation assistance in connection with the physical move?
  • Is there a contact person to whom the employee can go not only in an emergency but also to avoid becoming "out of sight, out of mind"?
  • If necessary to accomplish the assigned job duties, has the employee undergone training to get up to speed?
  • Has the assignee undergone an assessment of readiness?

To help the expatriate succeed, organizations are advised to invest in cross-cultural training before the relocation. The benefits of receiving such training are that it: 3

  • Prepares the individual/family mentally for the move.
  • Removes some of the unknown.
  • Increases self-awareness and cross-cultural understanding.
  • Provides the opportunity to address questions and anxieties in a supportive environment.
  • Motivates and excites.
  • Reduces stress and provides coping strategies.
  • Eases the settling-in process.
  • Reduces the chances of relocation failure.

See Helping Expatriate Employees Deal with Culture Shock .

As society has shifted from single- to dual-income households, the priorities of potential expatriates have evolved, as have the policies organizations use to entice employees to assignment locations. In the past, from the candidate's point of view, compensation was the most significant component of the expatriate package. Today more emphasis is on enabling an expatriate's spouse to work. Partner dissatisfaction is a significant contributor to assignment failure. See UAE: Expat Husbands Get New Work Opportunities .

When it comes to international relocation, most organizations deal with children as an afterthought. Factoring employees' children into the relocation equation is key to a successful assignment. Studies show that transferee children who have a difficult time adjusting to the assignment contribute to early returns and unsuccessful completion of international assignments, just as maladjusted spouses do. From school selection to training to repatriation, HR can do a number of things to smooth the transition for children.

Both partners and children must be prepared for relocation abroad. Employers should consider the following:

  • Have they been included in discussions about the host location and what they can expect? Foreign context and culture may be more difficult for accompanying family because they will not be participating in the "more secure" environment of the worksite. Does the family have suitable personal characteristics to successfully address the rigors of an international life?
  • In addition to dual-career issues, other common concerns include aging parents left behind in the home country and special needs for a child's education. Has the company allowed a forum for the family to discuss these concerns?

The work team

Whether the new expatriate will supervise the existing work team, be a peer, replace a local national or fill a newly created position, has the existing work team been briefed? Plans for a formal introduction of the new expatriate should reflect local culture and may require more research and planning as well as input from the local work team.

The manager/team leader

Questions organization need to consider include the following: Does the manager have the employee's file on hand (e.g., regarding increases, performance evaluations, promotions and problems)? Have the manager and employee engaged in in-depth conversations about the job, the manager's expectations and the employee's expectations?

Mentors play an important role in enhancing a high-performing employee's productivity and in guiding his or her career. In a traditional mentoring relationship, a junior executive has ongoing face-to-face meetings with a senior executive at the corporation to learn the ropes, set goals and gain advice on how to better perform his or her job.

Before technological advances, mentoring programs were limited to those leaders who had the time and experience within the organization's walls to impart advice to a few select people worth that investment. Technology has eliminated those constraints. Today, maintaining a long-distance mentoring relationship through e-mail, telephone and videoconferencing is much easier. And that technology means an employer is not confined to its corporate halls when considering mentor-mentee matches.

The organization

If the company is starting to send more employees abroad, it has to reassess its administrative capabilities. Can existing systems handle complicated tasks, such as currency exchanges and split payrolls, not to mention the additional financial burden of paying allowances, incentives and so on? Often, international assignment leads to outsourcing for global expertise. Payroll, tax, employment law, contractual obligations, among others, warrant an investment in sound professional advice.

Employment Laws

Four major U.S. employment laws have some application abroad for U.S. citizens working in U.S.-based multinationals:

  • Title VII of the Civil Rights Act.
  • The Age Discrimination in Employment Act (ADEA).
  • The Americans with Disabilities Act (ADA).
  • The Uniformed Services Employment and Reemployment Rights Act (USERRA).

Title VII, the ADEA and the ADA are the more far-reaching among these, covering all U.S. citizens who are either:

  • Employed outside the United States by a U.S. firm.
  • Employed outside the United States by a company under the control of a U.S. firm.

USERRA's extraterritoriality applies to veterans and reservists working overseas for the federal government or a firm under U.S. control. See Do laws like the Fair Labor Standards Act and the Family and Medical Leave Act apply to U.S. citizens working in several other countries?

Employers must also be certain to comply with both local employment law in the countries in which they manage assignments and requirements for corporate presence in those countries. See Where can I find international employment law and culture information?

Compensation

Companies take one of the following approaches to establish base salaries for expatriates:

  • The home-country-based approach. The objective of a home-based compensation program is to equalize the employee to a standard of living enjoyed in his or her home country. Under this commonly used approach, the employee's base salary is broken down into four general categories: taxes, housing, goods and services, and discretionary income.
  • The host-country-based approach. With this approach, the expatriate employee's compensation is based on local national rates. Many companies continue to cover the employee in its defined contribution or defined benefit pension schemes and provide housing allowances.
  • The headquarters-based approach. This approach assumes that all assignees, regardless of location, are in one country (i.e., a U.S. company pays all assignees a U.S.-based salary, regardless of geography).
  • Balance sheet approach. In this scenario, the compensation is calculated using the home-country-based approach with all allowances, deductions and reimbursements. After the net salary has been determined, it is then converted to the host country's currency. Since one of the primary goals of an international compensation management program is to maintain the expatriate's current standard of living, developing an equitable and functional compensation plan that combines balance and flexibility is extremely challenging for multinational companies. To this end, many companies adopt a balance sheet approach. This approach guarantees that employees in international assignments maintain the same standard of living they enjoyed in their home country. A worksheet lists the costs of major expenses in the home and host countries, and any differences are used to increase or decrease the compensation to keep it in balance.

Some companies also allow expatriates to split payment of their salaries between the host country's and the home country's currencies. The expatriate receives money in the host country's currency for expenses but keeps a percentage of it in the home country currency to safeguard against wild currency fluctuations in either country.

As for handling expatriates taxes, organizations usually take one of four approaches:

  • The employee is responsible for his or her own taxes.
  • The employer determines tax reimbursement on a case-by-case basis.
  • The employer pays the difference between taxes paid in the United States and the host country.
  • The employer withholds U.S. taxes and pays foreign taxes.

To prevent an expatriate employee from suffering excess taxation of income by both the U.S. and host countries, many multinational companies implement either a tax equalization or a tax reduction policy for employees on international assignments. Additionally, the United States has entered into  bilateral international social security agreements  with numerous countries, referred to as "totalization agreements," which allow for an exemption of the social security tax in either the home or host country for defined periods of time.

A more thorough discussion of compensation and tax practices for employees on international assignment can be found in SHRM's Designing Global Compensation Systems toolkit.

How do we handle taxes for expatriates?

Can employers pay employees in other countries on the corporate home-country payroll?

Measuring Expatriates' Performance

Failed international assignments can be extremely costly to an organization. There is no universal approach to measuring an expatriate's performance given that specifics related to the job, country, culture and other variables will need to be considered. Employers must identify and communicate clear job expectations and performance indicators very early on in the assignment. A consistent and detailed assessment of an expatriate employee's performance, as well as appraisal of the operation as a whole, is critical to the success of an international assignment. Issues such as the criteria for and timing of performance reviews, raises and bonuses should be discussed and agreed on before the employees are selected and placed on international assignments.

Employees on foreign assignments face a number of issues that domestic employees do not. According to a 2020 Mercer report 4 , difficulty adjusting to the host country, poor candidate selection and spouse or partner's unhappiness are the top three reasons international assignments fail. Obviously, retention of international assignees poses a significant challenge to employers.

Upon completion of an international assignment, retaining the employee in the home country workplace is also challenging. Unfortunately, many employers fail to track retention data of repatriated employees and could benefit from collecting this information and making adjustments to reduce the turnover of employees returning to their home country.

Safety and Security

When faced with accident, injury, sudden illness, a disease outbreak or politically unstable conditions in which personal safety is at risk, expatriate employees and their dependents may require evacuation to the home country or to a third location. To be prepared, HR should have an evacuation plan in place that the expatriate can share with friends, extended family and colleagues both at home and abroad. See Viewpoint: Optimizing Global Mobility's Emergency Response Plans .

Many companies ban travel outside the country in the following circumstances:

  • When a travel advisory is issued by the World Health Organization, Centers for Disease Control and Prevention, International SOS or a government agency.
  • When a widespread outbreak of a specific disease occurs or if the risk is deemed too high for employees and their well-being is in jeopardy.
  • If the country is undergoing civil unrest or war or if an act of terrorism has occurred.
  • If local management makes the decision.
  • If the employee makes the decision.

Once employees are in place, the decision to evacuate assignees and dependents from a host location is contingent on local conditions and input from either internal sources (local managers, headquarters staff, HR and the assignee) or external sources (an external security or medical firm) or both. In some cases, each host country has its own set of evacuation procedures.

Decision-makers should consider all available and credible advice and initially transport dependents and nonessential personnel out of the host country by the most expeditious form of travel.

Navigating International Crises

How can an organization ensure the safety and security of expatriates and other employees in high-risk areas?

The Disaster Assistance Improvement Program (DAIP)

Repatriation

Ideally, the repatriation process begins before the expatriate leaves his or her home country and continues throughout the international assignment by addressing the following issues.

Career planning. Many managers are responsible for resolving difficult problems abroad and expect that a well-done job will result in promotion on return, regardless of whether the employer had made such a promise. This possibly unfounded assumption can be avoided by straightforward career planning that should occur in advance of the employee's accepting the international assignment. Employees need to know what impact the expatriate assignment will have on their overall advancement in the home office and that the international assignment fits in their career path.

Mentoring. The expatriate should be assigned a home-office mentor. Mentors are responsible for keeping expatriates informed on developments within the company, for keeping the expatriates' names in circulation in the office (to help avoid the out-of-sight, out-of-mind phenomenon) and for seeing to it that expatriates are included in important meetings. Mentors can also assist the expatriate in identifying how the overseas experience can best be used on return. Optimum results are achieved when the mentor role is part of the mentor's formal job duties.

Communication. An effective global communication plan will help expatriates feel connected to the home office and will alert them to changes that occur while they are away. The Internet, e-mail and intranets are inexpensive and easy ways to bring expatriates into the loop and virtual meeting software is readily available for all employers to engage with global employees. In addition, organizations should encourage home-office employees to keep in touch with peers on overseas assignments. Employee newsletters that feature global news and expatriate assignments are also encouraged.

Home visits. Most companies provide expatriates with trips home. Although such trips are intended primarily for personal visits, scheduling time for the expatriate to visit the home office is an effective method of increasing the expatriate's visibility. Having expatriates attend a few important meetings or make a presentation on their international assignment is also a good way to keep them informed and connected.

Preparation to return home. The expatriate should receive plenty of advance notice (some experts recommend up to one year) of when the international assignment will end. This notice will allow the employee time to prepare the family and to prepare for a new position in the home office. Once the employee is notified of the assignment's end, the HR department should begin working with the expatriate to identify suitable positions in the home office. The expatriate should provide the HR department with an updated resume that reflects the duties of the overseas assignment. The employee's overall career plan should be included in discussions with the HR professional.

Interviews. In addition to home leave, organizations may need to provide trips for the employee to interview with prospective managers. The face-to-face interview will allow the expatriate to elaborate on skills and responsibilities obtained while overseas and will help the prospective manager determine if the employee is a good fit. Finding the right position for the expatriate is crucial to retaining the employee. Repatriates who feel that their new skills and knowledge are underutilized may grow frustrated and leave the employer.

Ongoing recognition of contributions. An employer can recognize and appreciate the repatriates' efforts in several ways, including the following:

  • Hosting a reception for repatriates to help them reconnect and meet new personnel.
  • Soliciting repatriates' help in preparing other employees for expatriation.
  • Asking repatriates to deliver a presentation or prepare a report on their overseas assignment.
  • Including repatriates on a global task force and asking them for a global perspective on business issues.

Measuring ROI on expatriate assignments can be cumbersome and imprecise. The investment costs of international assignments can vary dramatically and can be difficult to determine. The largest expatriate costs include overall remuneration, housing, cost-of-living allowances (which sometimes include private schooling costs for children) and physical relocation (the movement to the host country of the employee, the employee's possessions and, often, the employee's family).

But wide variations exist in housing expenses. For example, housing costs are sky-high in Tokyo and London, whereas Australia's housing costs are moderate. Another significant cost of expatriate assignments involves smoothing out differences in pay and benefits between one country and another. Such cost differences can be steep and can vary based on factors such as exchange rates (which can be quite volatile) and international tax concerns (which can be extremely complex).

Once an organization has determined the costs of a particular assignment, the second part of the ROI challenge is calculating the return. Although it is relatively straightforward to quantify the value of fixing a production line in Puerto Rico or of implementing an enterprise software application in Asia, the challenge of quantifying the value of providing future executives with cross-cultural perspectives and international leadership experience can be intimidating.

Once an organization determines the key drivers of its expatriate program, HR can begin to define objectives and assess return that can be useful in guiding employees and in making decisions about the costs they incur as expatriates. Different objectives require different levels and lengths of tracking. Leadership development involves a much longer-term value proposition and should include a thorough repatriation plan. By contrast, the ROI of an international assignment that plugs a skills gap is not negatively affected if the expatriate bolts after successfully completing the engagement.

Additional Resources

International Assignment Management: Expatriate Policy and Procedure

Introduction to the Global Human Resources Discipline

1Mulkeen, D. (2017, February 20). How to reduce the risk of international assignment failure. Communicaid. Retrieved from https://www.communicaid.com/cross-cultural-training/blog/reducing-risk-international-assignment-failure/

2Mercer. (2020). Worldwide Survey of International Assignment Policies and Practices. Retrieved from https://mobilityexchange.mercer.com/international-assignments-survey .

3Dickmann, M., & Baruch, Y. (2011). Global careers. New York: Routledge.

4Mercer. (2020). Worldwide Survey of International Assignment Policies and Practices. Retrieved from https://mobilityexchange.mercer.com/international-assignments-survey

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Questions an Employee Should Ask Before Accepting an International Assignment

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An employee is likely to see an offer of an international assignment as a vote of confidence from an employer and an opportunity for career advancement. However, there are a number of questions the mobile employee should ask of his or her employer prior to accepting the international assignment, especially when it comes to questions related to regulatory requirements (e.g., immigration, tax compliance) and compensation and benefits issues in both the employee’s Home and Host countries.

What Kind of Mobility Support Will Be Provided?

Mobile employees often face a number of regulatory issues stemming from their international move, including making sure that immigration and tax matters are handled appropriately for both themselves and any accompanying family members. The employee needs to determine whether he or she will be facing these matters on their own or whether their employer has a plan in place to provide them with assistance.

Many companies that regularly assign employees internationally have programs in place to ensure their employees are compliant with the immigration requirements of the Host country and the tax issues that often arise in both the Home and Host countries. However, if the company does not provide such a program, the mobile employee needs to seek clear answers as to the assistance their employer will be providing. For example, if your employer is not planning to provide support regarding tax issues while you are working internationally, you should seek the assistance of a global mobility tax professional in advance of the move to ensure you understand and can take the steps needed to comply with all applicable laws and regulations. Failure to comply can result in unforeseen tax bills, reputational damage, and even legal issues. 

Likewise, the mobile employee needs to inquire as to whether company support will continue once they have relocated to the Host country. Issues with a mobile employee’s residency and tax obligations may arise months or even years after they have relocated to a Host country. Will your employer provide support after you are established in the Host country, or does the company only provide support for mobile employees during their initial move? If your employment or personal income become subject to tax at a higher tax rate than you would have had in your Home country, will the company cover this increase in tax liability through tax gross-ups or a tax equalization policy that is designed to keep you in a neutral tax position during your employment abroad?

Will You Be Subject to Tax in the Host Country for Income or Social Tax Purposes?

Mobile employees may be subject to Host country income and/or social tax from their first day of work in the new location. For this reason, it is critical to understand the Host country tax rules in advance of working abroad. Here, the employee and employer should understand both the domestic rules for registering (i.e., do you need a tax identification number), reporting income, making tax payments (e.g., withholding or other payments), and filing income tax returns. In addition, there may be income tax treaties or totalization agreements (an agreement between the Home and Host location for social security purposes) that can address potential double taxation and compliance requirements.   

Although many income tax treaties provide for a Host country income tax exemption for temporary employment, often for periods up to 183 days, it is important to understand if this rule will apply. The “183 day” rule is only one of a number of conditions that must be met to qualify for the exemption and the specific rule and interpretation can vary by country combination. As well, even if an income tax treaty exemption applies, it will only govern the income tax requirements and will not protect a mobile employee from other types of taxes or social security payments that may be levied in the Host country.

Rather than attempting to work through the complex Home and Host country tax rules themselves, mobile employees should consult with their company or an outside mobility tax specialist to understand how their income will be taxed and the company policies that apply for compliance support and to address any incremental tax burdens 

What Are the Company’s Compensation and Benefits Policies for International Employees?

It is important for a mobile employee to understand the potential incremental costs that can apply when working abroad and their company’s policy for handling these costs. Some costs, such as housing and moving expenses are more obvious. However, there can also be differences between the Home and Host location for the cost of goods, transportation, and children’s education that may require further review.   

Some companies will structure compensation packages in a manner that ensures the mobile employee will not suffer a reduction of income because of the assignment. This may include working with a data provider who specializes in understanding the differences in cost between the Home and Host location. As mentioned above, it is also important for the employee to consider the difference in taxation between the locations in determining their take-home pay. Many companies will employ a tax reimbursement policy (e.g. tax equalization) to address any difference in Home and Host tax costs. 

Note that some employers distinguish between international assignments that are initiated by the company and those that are requested by the employee. The company may not provide the same degree of assistance for differences in cost between the Home and Host location for self-initiated scenarios. In those situations, an employee will find it much harder to procure a tax equalization arrangement from their employer making it even more critical to obtain professional advice in advance of the move.

Sometimes an international assignment will move a mobile employee from his or her Home country employer to a subsidiary located in the Host country. The change can have a much larger impact on mobile employees than just a change in the name of the company issuing their paycheck. The subsidiary may offer a different benefits package, including changes in medical plans, insurance, and retirement plans. The move could also cause a mobile employee to lose benefits that have been accrued with their current employer. 

Here again, it is critical for the employee to understand what benefits will apply while working abroad and the Home and Host country implications. For example, there can be tax implications for ongoing participation in the Home country pension plan in the Host country or Home country tax complexities if participating in a Host country plan. If possible, a mobile employee should also negotiate to address any reduction in benefits or loss of accrued benefits as a result of accepting an international assignment.

US citizens and residents face a number of challenges when they live and work in another country. One of the most significant challenges is understanding the application of US and foreign tax laws. Download our taxation booklet designed to help US citizens and residents gain a general understanding of the unique tax provisions associated with living and working abroad.

Download the booklet here.

The information provided in this article is for general guidance only and should not be utilized in lieu of obtaining professional tax and/or legal advice.

Author Gina Chang

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Aspects of employee leasing in international assignments

27. März 2017

Recent challenges and successful management: the inbound perspective

By Yvonne Schmidt and Sachka Stefanova-Behlert

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It is no secret that international employee assignments are a complex matter. To achieve an optimal structure, a strategic approach accommodating labor, tax, social-security and immigration laws is required. In some cases, a tension may appear between tax- and labor-law implications. In order to avoid a tax-permanent establishment in the host country, home companies tend to structure international assignments in a way that may give rise for concerns under employee leasing laws of the host jurisdictions.

Generally, there are two forms of employee assignments from a labor-law perspective: a) in the framework of the provision of services and b) in the framework of employee leasing. The latter is often subject to national requirements for registration, licensing, certification, financial guarantees or monitoring. Noncompliance with the requirements normally triggers various adverse consequences for companies: financial penalties, management liability, drawbacks in potential labor-law disputes and disqualification in public procurement procedures, etc.

International assignments are not exempted from such requirements. Moreover, national laws concerning employee leasing often contain mandatory provisions for the jurisdictions involved that have an impact on cross-border activities. This is another reason why companies not specializing in commercial employee leasing try to avoid the application of employee leasing laws.

As a consequence, finding the balance between tax- and labor-law implications presents one of the core tasks for management when planning and designing international employee assignments.

Recent labor-law challenges in Germany: the concept of “employee leasing”

Companies conducting employee leasing in Germany require a license. However, the concept of employee leasing under German law may vary from the one in the home country and trigger uncertainty as to the proper qualification of (international) assignments to Germany.

Starting on April 1, 2017, employee leasing in Germany is explicitly defined in Section 1 (1) of the German Law on Labor Leasing (Arbeitnehmerüberlassungsgesetz, AÜG) as the assignment of employees by the contractual employer to a user employer to perform temporary work while being integrated into the work organization of the user employer and bound by his or her directions. Apart from certain statutory exceptions, the maximum leasing period should not exceed 18 months (Section 1 (1) of the AÜG).

The above definition clarifies that employee leasing in Germany is not limited to commercial employee leasing and may encompass any international assignment. It does not seem to be a helpful qualification tool in the following situations:

  • Often the degree of integration of the assigned employee into the work organization of the user employer (here the host company) evolves in the course of the assignment regardless of the initial intention of the parties.
  • International assignments are often characterized by the shared exercise of supervision through the home and host company. In many cases, the assigned employee performs services on behalf of both companies. A clear allocation of services may be difficult.

According to German law, the formal content of contractual arrangements between the parties is not decisive; it is the actual execution of contracts that should determine the character of assignments. As the examples (above) show, the actual performance of international assignments may appear difficult to fit into the recognized forms of employee assignments.

In cases of intercompany assignments, companies often make use of the group privilege doctrine pursuant to Section 1 (3) No. 2 of the AÜG (Konzernprivileg), which implies that the AÜG is not applicable to employee leasing between companies in a single group within the meaning of Section 18 of the German Stock Corporation Act (Aktiengesetz, AktG) if the employee is not hired and employed for the purpose of leasing. Therefore, group companies whose purpose is to hire out personnel to other group companies cannot make use of this privilege. Furthermore, the Konzernprivileg requires that the intercompany assignment is limited in time (not necessarily limited to 18 months) and a repatriation of the assigned employee to the home company is intended. Therefore, group companies whose purpose is to hire out personnel to other group companies cannot make use of this privilege. If these requirements are not met, companies must clarify the character of the assignment in advance.

Obligations of the companies involved

Starting on April 1, 2017, the home and host company are obliged to disclose the assignment as employee leasing in the underlying intercompany agreement in cases of employee leasing (Section 1 [1] of the AÜG), and the home company must inform the leased employees about the character of their assignment (Section 11 [2] of the AÜG). Apart from any financial penalties, violations of these obligations trigger the same legal consequences as cases involving the conduct of employee leasing without a license or in exceeding the maximum leasing period. Pursuant to Section 9 No. 1a of the AÜG, the contractual relationship between the home company and the assigned employee is deemed invalid and an employment relationship with the host company is established unless the assigned employee exercises his or her objection right.

The consequences are twofold:

  • Companies can no longer avert sanctions in cases of improper qualification of assignments by obtaining a precautionary license – the practice in the past.
  • Companies must clarify the character of the assignment in advance; they bear the full risk of improper qualification since there is no binding preliminary procedure to determine the status of the assignment before the competent authorities in Germany.

Successful management

Step 1: Clarify the character of assignments in advance

Should the planned assignments trigger employee leasing, companies must also consider the requirements of the home country when clarifying the character of the assignment. German audit authorities may require compliance with the home country’s laws in order to approve assignments to Germany under the AÜG.

Step 2: Choosing the proper contractual setup

Secondment agreement with the home company

Domestic secondment agreements are a popular contractual tool for international assignments. Social-security considerations and the application of the more familiar domestic law account for this trend.

From an employee-leasing perspective, this tool remains appropriate in the following scenarios:

  • Assignments in the form of the provision of services.
  • Assignments in the form of privileged employee leasing (Konzernprivileg) provided that the assignment is fixed term (not necessarily limited to 18 months) and a repatriation opportunity of the assigned employee is ensured.
  • Assignments in the form of nonprivileged employee leasing provided that both the secondment agreement and the intercompany agreement are limited to the maximum leasing period of 18 months and identify the assignment as employee leasing in addition to the license requirement.

In the first two scenarios, companies are well advised to provide for the objection of the assigned employee to the fictional establishment of an employment relationship with the host company in the secondment agreement should the audit authorities unexpectedly qualify the assignment as employee leasing.

The best approach to dealing with the uncertainties about the proper qualification of assignments is, however, to either treat assignments as cases of unprivileged employee leasing or to conclude a local contract with the host company.

Local contract with the host company

Conclusion of a local contract is the way to proceed if companies want to avoid employee-leasing restrictions or if the requirements for legal employee leasing cannot be fulfilled.

In addition, this contractual tool offers the following benefits:

  • It creates legal clarity for the parties regarding the applicable law by avoiding the application of both home and host jurisdictions. In light of the European Commission’s proposal to apply the labor law of the host country to assignments over 24 months (see Proposal for Amendment of the Directive 96/71/EC concerning posting of employees as of March 8, 2016), this contractual tool is the preferable option for long-term assignments. This also applies to privileged employee-leasing scenarios.
  • It does not hinder the retention of social-security coverage and benefits from the home country in the prevailing number of assignments.
  • The tax deductibility of business expenses is not noticeably reduced by the conclusion of a local contract.

Given the statutory sanctions in cases of noncompliance with the AÜG, companies are strongly advised to proactively tackle aspects of employee leasing in international assignments to Germany. Determining the character of the assignments may appear to be a difficult task for companies due to the various uncertainties characterizing the concept of employee leasing in Germany, nevertheless companies have considerable leeway to structure assignments in a way that keeps their exposure to employee-leasing risks manageable. Choosing the proper contractual setup is one of the steps forward toward successful management. In many cases, the conclusion of a local contract with the host company appears to be the preferable option in a cross-border context.

The authors would like to thank Susanne Härzke, Tax Adviser and Senior Manager at KPMG AG Wirtschaftsprüfungsgesellschaft, for her valuable contribution to this article. 

[email protected]

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Long-term assignments: well prepared for the next stage!

Long-term assignments: well prepared for the next stage!

With a long-term assignment, the assignee spends a period of several years abroad, in contrast to a short-term assignment.  

These situations, where an employee lives abroad for several years, place high demands on the employee and his family, and also on his company. After all, it is also in your best interests if the employee doesn't view the change of residence and job as a burden, but as an opportunity and a chance for personal development.  

Put the focus on the human factor with Henk International.

We would like to encourage companies to consider the human factor of a move abroad, as well as the organisational, taxation and insurance aspects. In our experience, it is important to give the assignee a generous amount of time off in order to look after bureaucratic procedures, take language courses and attend medical appointments.  A look-and-see-trip is another way to help prepare all the people involved and take away any fears of the unknown. 

"It’s never been just about moving.“: our many years of experience with moves abroad have shown that, especially with long-term assignments, it is important to consider the social components of a move, and not just view it as a movement of belongings from A to B. 

The more comfortable the experience for the assignee and the family, the more motivated that person will be for the new task at destination. 

In over 50 years, Henk International has specialised in meeting the demands connected with foreign assignments. We offer a comprehensive, tailor-made move management concept that includes services connected with relocation, group moves and repatriation - all from one source.   

Amendment of the employment contract if the stay abroad exceeds one month 

Working stays abroad of up to one month are classified as business trips, and for these there is no need to change the work contract. If the stay abroad is longer than one month, then the employment contract needs to be amended. The contract should define the length of the stay abroad, the conditions for the return and the time after that, notice periods, place of work, salary and the currency in which the salary is paid.  

In addition, it can be a good idea to define vacation time and public holidays, payment of expenses and the need for additional insurance cover. 

Taxation and insurance 

If the assignee keeps his residence in Germany, then he needs to continue making his tax return here. To avoid double taxation, the German government has made special agreements with many countries. 

If the stay abroad is less than 183 days, and if the salary is paid by the company in Germany, then all tax issues take place in Germany. 

For long-term assignments, income generated abroad is taxed abroad. The tax payments are taken into account in Germany. If the assignment is for a fixed period of time, and the assignee is expected to return to the company in Germany, then social security arrangements in Germany continue. This also applies to expats who work for subsidiaries abroad and continue to receive a salary from the company in Germany.  

Assignments within the EU should not initially exceed 12 months. Should an extension of the stay abroad be necessary, an application must be made to the social security authorities of the host country before the 12-month period is over. Should the application be approved, the German social insurance still applies. Employees who are regularly deployed in several EU countries have to make social insurance contributions in those countries where they earn at least 25% of their income. To help expats to avoid any problems, it can make sense to make voluntary social insurance contributions. 

Germany has agreements with many non-EU countries to regulate social insurance contributions. Each individual case needs to be checked to see which insurance benefits (social, health and accident insurance) are avaiable to which conditions. For assignments to countries for which no special agreement exists (like Russia and Saudi Arabia), the German regulations apply. 

Things to consider when the expat returns 

The long-term assignment can end when the agreed assignment period comes to an end, or when the employer recalls the expat, or the expat resigns. In every case, it is important to decide in advance the entitlements and obligations of both parties. When the expat returns to the origin country, the conditions of this return need to be agreed, for example, if the old work contract still applies, or if a new contract is needed. Does the person return to the old position or take up a new job?  

Next to legal and contractual aspects, the human factor should also be considered. Companies that want the best for and from their employees provide the framework for a smooth repatriation. 

Do you have any questions?  Contact us for advice from our international assignment experts.  Send us an email or call us on +49 211 99 80 70 . email

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We specialise in providing integrated moving services with a single point of contact. With Henk International you always receive an end-to-end solution, no matter what services you require: office moving or speciality moves for businesses , expat management or typical services for private moves within Germany or abroad.

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Delivering A Successful International Assignment

  • Anne Morris
  • 9 October 2019

IN THIS SECTION

  • 8 minute read
  • Last updated: 9th October 2019

Organisations deploy personnel on international assignment for many reasons. Whether you are addressing an internal skills gaps, supporting leadership development or looking to improve working relations across borders, for any international assignment to be successful, there will be a multitude of legal, immigration, tax and pensions risks to manage when sending employees overseas.

This article covers:

International assignment objectives, international assignment structures, employment law.

  • Immigration options 

Assignee remuneration

Professional support for international assignments.

Global mobility programmes have traditionally been developed with a uniform approach, driven largely by cost management and operational efficiencies. However, organisations are increasingly taking a more flexible and bespoke approach to overseas assignments in order to attain advantage in areas such as compliance and talent development and retention.

While a one-size-fits-all approach to the fundamentals of mobility management may be a commercial reality, overlaying this should be areas of specific consideration and capability that can be adapted to the specific needs and risks of each international assignment. This allows for greater focus on the assignment’s commercial objectives and the agility to respond to the organisation’s changing global mobility needs .

From the outset of any successful assignment project, there should be clarity of objectives. Why as an organisation is the decision being made to invest in sending an employee to perform services in a different country?

International assignments can offer value in many areas, many of which typically present in the longer-term.

Internal knowledge transfer is a common assignment objective to address talent or skills shortages within overseas regions. Deploying key talent with specialist knowledge and skills to train and upskill local team members can help to resolve local labour or skill supply issues. The cost/benefit analysis can explore potential missed opportunities or delays resulting from shortages in the local talent market.

International assignments are also highly effective in building relationships and improving intercultural working. This could be relationships within an organisation, with local clients and intermediaries or local authorities. Face to face interaction remains highly effective and valuable in building influence on the ground and can offer significant potential for advantage over competitors.

Beyond relationships, value is also created in the knowledge gained by assignees working overseas, from insight into local customs and culture, improved language capability and a general understanding of how business is ‘done’ within the region and helping to adapt organisational protocol to suit the local environment. Combined with the assignee’s existing market and organisational knowledge, they can offer a global perspective with local details, bringing considerable potential to build competitive differentiation.

With clarity of objective, you can then consider whether an international assignment is the most appropriate solution . Is it possible to hire or promote locally? Would multiple, shorter trips be as effective in performance terms but with lower cost implications? International assignments demand significant investment and it will be important to assess cost projections against expected return and value to the organisation.

As well as clarity of objectives, a successful international assignment also requires clarity of contractual terms, both to manage the expectations and understanding of the assignee, and also for the mobility team to identify support needs and potential risks. 

Now more than ever, organisations are developing portfolios of mobility programmes to enable an agile approach to global mobility that responds to the organisation’s changing needs for international personnel mobility. Assignments come in increasingly different shapes and sizes, from permanent relocations or temporary exchanges, secondments or transfers to a different region or to a different organisation.

While organisations demand greater flexibility and agility from their global mobility programmes, underpinning the activity should be an appropriate assignment structure with a supporting contractual agreement that enables compliance with regulatory and legal duties.

When considering which structure to adopt, organisations will need to consider a range of factors including the type of assignment and the relevant environmental context such as regulatory, immigration, employment law, tax, pension implications. 

For international assignments, where the employee is moving from the home country employer to a host country employer, the employer could consider a number of assignment structures, including:

  • The employee continues to be employed solely by the home employer.
  • The employment contract with the home employer is suspended for the duration of the assignment while the employee enters into a new employment contract with the host employer .
  • The employment contract with the home employer is terminated with a promise of re-employment at the end of the assignment while the employee enters into a new employment contract with the host employer .
  • The employment contract with the home employer is suspended and the employee enters into a contract with an international assignment company (IAC) within the employer group
  • The employment contract with the home employer is suspended and the employee enters into a contract with both an IAC and the host country employer.
  • The employee remains resident in the home country and works in a host country under a commuter assignment.  

Each type of assignment structure offers advantages and disadvantages which should be considered in light of the individual assignment. For example: 

  • Do employment laws in the host country require the assignee to be employed by a local entity? 
  • Would the assignee be agreeable to ending their home country contract and starting a new agreement with a new entity in the host country? 
  • Are there terms in the home country contract that would need protecting in any new agreement, such as restrictive covenants? 
  • Which jurisdiction would prevail, the host or home country? 
  • How would local laws interpret a situation where there is no contract of employment with the employer in the host country? 
  • Issues such as income and corporate tax, pension and employment rights and responsibilities will need to be identified and assessed against the specific assignment objectives and budget and the assignee profile and circumstances. 

Employment law implications come hand-in-hand with selecting an appropriate assignment structure.

Home-country employment contracts for employees on assignment from the UK to an overseas jurisdiction should generally be interpreted under the laws of England and Wales. If a host country contract is used, there should be specific provision in the agreement to determine which jurisdiction would prevail. However, neither position is guaranteed, for example where issues of domicile arise which may supersede any contractual provisions. Again the need is to assess on an individual assignment basis.

As well as explicit contractual considerations, employers should also be aware of any statutory rights or implied terms under UK law that may continue to apply even in the host country.

Specific provisions may also need to be made to ensure confidentiality and appropriate handling of commercial and sensitive information. While this may be standard or expected for senior employees, those on assignment should also be considered for such terms relevant to the type of assignment and the commercial objectives of the project.

Immigration options

Successful international assignments will invariably require careful consideration of the immigration requirements. Governments across the globe are adopting increasingly protectionist stances towards economic migrants, as policies seek to favour domestic workers. This means business travellers and visa holders are now facing greater scrutiny when applying for work visas and when trying to gain entry at the border. 

Visa options and criteria vary between countries and are subject to frequent change. Where permission is required for the assignee to work in the host country, it will be important to ensure the assignee applies for the most appropriate route to meet the assignment need, whether that is a work permit or a business visitor visa. The immigration requirements and options will be determined in most part by the rules of the home and host countries, the nationality of the assignee (and any of their dependants who will be joining them overseas) and the nature of the activities the assignee intends to perform during their time in the host country. 

For example, a British citizen may be eligible to travel to the US to attend sales meetings and work conferences for up to 90 days  without having to apply for a visa but to conduct ‘gainful employment’ they would need to look at a specific work visa, such as the L-1 visa for intracompany  transfers. 

A further factor will be the specific requirements of the visa or permit. Work visas, for example, may require sponsorship of the employee by a local entity with valid sponsor status. The application process for work visas are typically resource-intensive and in many cases will require the employer to provide compelling evidence as to why the role or work cannot be performed by a worker resident in the host country. 

Preparation will, therefore, be critical, ensuring there is sufficient time to consider the relevant immigration options in light of local rules, and to then make the required application. Complications may also arise where the employee does not meet certain requirements under the local rules, for example if they have a past criminal conviction or negative immigration record. This will require careful handling and, depending on the host country’s rules, may require submission of a visa waiver to explain the issue and provide assurances of the employee’s eligibility by requesting a discretionary decision on the application.

Relocation packages are typically the biggest expense associated with an international assignment. While cost control will remain a concern, it is important for employers to ensure they are offering packages that are competitive within the market and that the package will support both the commercial objective of the assignment and compliance with associated legal and tax risks.

Home-based packages remain common, including those which may be markedly above local market compensation levels, particularly in circumstanecs where the assignment need is business-critical.

It may be possible however to look at offering a lower package than the home-based option, by either localising the package to harmonise with host nation levels or to develop a ‘local-plus’ offering that maintains a degree of competition, but this can be challenging to apply consistently across all assignment types and locations.

Again, consideration should be given to the individual assignment and the assignee. Millennial workers for example are generally understood to value international experience and the remuneration package may not be their primary concern where the opportunity for overseas exposure is available.

For organisations with a substantial cohort of international assignees and travellers, it may be more appropriate to build a compensation scheme specifically for globally-mobile personnel.

Importantly, assignees who will remain under an employment contract in their home country may continue to be subject to home country payroll while on assignment. This will also enable pension and benefits to be offered in the same way through the home country. Taxation, however, raises more complex issues, for example where withholding rules apply in the host country. This will require specialist guidance to ensure tax liabilities in the home and host country are correctly managed and met withiin the appropriate timeframes.

International assignments are demanding on the employer and the employee, but have become critical given the business imperatives to meet talent and development needs and achieve competitive advantage . 

Employers should not lose sight of the need to understand the specific risks of each individual assignment, which increasingly demand bespoke solutions. While compliance , efficiencies and cost control should be underpinned by a solid global mobility infrastructure of policies, systems and procedures, the current shift is away from a uniform approach to assignment management, instead moving towards more agile management of each assignment, shaped by the specific assignment objectives, budget and risks in relation to immigration, tax, remuneration and employment law.

DavidsonMorris’ specialist global mobility consultants provide expert guidance to employers on all aspects of international assignments, from programme management and implementation to strategic consultancy to ensure value and return on the mobility investment. We understand the commercial drivers behind mobilising workers and the need to ensure compliance without impacting return on mobility investment.

We work with senior management teams, HR and mobility professionals to develop strategies that ensure effective compliance risk management while supporting delivery of the organisation’s global mobility objectives. For advice on making the most of international assignments, speak to us .

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility .

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners , we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

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How to prepare expats for foreign assignment

Return on investment (roi) is key  for a global hr team managing expat employees on international assignment. rates of expat failure can be as high as 40% , depending on the industry. as investment in an assignment can be more than $300,000, failure is expensive in both financially and timewise. , choose the right person.

Preparing expatriates for foreign assignment begins as early as the selection process. Research by Cut-e shows the ability to excel at a role may not be enough for expat success . The most accomplished new expats have a range of soft skills including:

  • Emotional stability
  • Sensitivity to other cultures
  • Better than average interpersonal skills
  • Demonstrated flexibility

Ensure candidates demonstrate these and similar traits with practical examples at interview stage.  

Pre-assignment training

Preparation is key when any employee is moving abroad to work. Global HR can support the employee by developing thorough pre-assignment training . This should help:

  • Anticipate potential challenges
  • Develop strategies to overcome them
  • Better understand societal and business norms
  • Understand the overarching goal of their overseas assignment

This is particularly useful for those working abroad for the first time. Ideally pre-departure training covers topics like:

  • Cultural training
  • Local language skills
  • Information on the host country  

Home and host mentors

Support on the ground.

One of the leading causes of expat failure is the unhappiness of an expat’s spouse or family. Ensure the expat and their family has practical support from HR in the destination country. This should cover elements like:

  • Finding a place to live
  • Setting up a bank account
  • International Health Insurance
  • Enrolling children in school
  • How the tax system works  

Interviews with expats in Personnel Today highlighted the importance of information, contacts, and processes fitting together, so settling in is easy.  

Stay in contact

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The Mercer Mobility Exchange website and its divisional websites may be translated for your convenience using translation software powered by Google Translate, a free online language translation service that can translate text and web pages into different languages. Reasonable efforts have been made to verify the reliability of the translation service, however, no automated translation is perfect nor is it intended to replace human translators. Mercer does not guarantee the accuracy of the translated text. Some pages may not be accurately translated due to the limitations of the translation software. Text in images, PDF files, Word documents or other document types cannot be translated. The official text is the English version of the website. Any discrepancies or differences created in the translation are not binding and have no legal effect for compliance or enforcement purposes. If any questions arise related to the accuracy of the information contained in the translated website, please refer to the English version of the website which is the official version

international assignment to germany

Local Approaches for Internationally Mobile Employees

By Juliane Gruethner , Mercer

Local approaches are often perceived as a way to streamline and to simplify the administration of international assignments. Furthermore, the perception is that the approach can reduce costs of international assignments – directly or indirectly.

Are companies sending employees abroad on local or local-plus conditions - Mercer survey highlights

The number of local plus contracts has increased over the last few years, and nearly all (96%) have employees on local plus conditions, more than a third (35%) of the non-local employees are on local plus packages, and the majority of companies (57%) expect this number to raise further.

However, local contracts come in different shapes and sizes. A common understanding in the continuous discussion around local contracts is therefore not guaranteed. What does a local contract actually mean?

The Local Contract

A local contract means employment under local terms in the host location. This usually involves cutting all employment-related links to the home country. The employee is provided with a local employment contract (if applicable) in the host country. This would usually also entail a local salary. The concept has been used for some years in various industries, e.g. financial or legal services. In these industries assignments often take place to locations such as New York, London, or Singapore. The host locations are attractive also from a salary point of view. Local salaries are high and international employees can integrate into the local, usually very international, community, relatively easily. Due to the company structure and organization, permanent employment in the host country or a consecutive assignment to another location may be desired. A return to the home country is often not planned.

The Local Salary

However, when a local contract is provided to an employee moving internationally, the employee often is not consequently fully integrated into the local salary and benefits structure in the host location. As a starting point, the base salary is typically established according to the local pay structure only (41%), and a fifth of companies would add a premium/adjustment to the local salary (21%). Some companies might even grant the better of the local net and a home-based net compensation calculated following a traditional balance sheet approach (‘better of’ approach). And depending on assignment type, host location and home country or the assignee’s individual situation, it often is necessary to supplement the host base compensation with all kinds of allowances and benefits in order to remain competitive and facilitate mobility.

Percentage of internationally mobile workforce on various local contract terms - Mercer survey highlight

The Local Plus Contract

Therefore, employees moving abroad on local contracts are actually moved on local plus contracts rather than pure local contracts. They receive a local employment (contract), local salaries, but various benefits and allowances on top, which are usually not granted to employees in the respective host location or at least not to employees employed on a comparable level in the host location. Those additional allowances and benefits are often similar to expatriate benefits and allowances, as indicated in Mercer’s 2018 Local Plus Survey (though amounts may vary):

Elements of local-plus compensation packages - Mercer survey highlight

Those additional allowances and benefits granted to local plus employees are hard to remove or decrease, and therefore hardly ever are removed. For example, to discontinue the reimbursement of schooling fees would be a huge disadvantage for the employees’ financials and well-being in the host location and are therefore often granted for an unlimited period.

But does the concept to employ internationally mobile employees on local contracts work for every company and every scenario? Are local and local plus contracts the answer to all Global Mobility challenges? The main driver according to Mercer’s recent local plus survey is cost reduction, followed by market competitiveness and the desire to create local equity.

Financial Impact on the Global Mobility Program

The fact that localized employees or employees on local and local plus contracts in many scenarios will receive a higher or at least comparable compensation as an international assignee illustrates that the conviction that international employees on local contracts are cheaper may be a misconception. In addition to a higher compensation (compared to the local market), relocation support is also granted. Companies are more willing to invest in one-off services in the beginning of an international employment on local terms in order to secure a successful international assignment and to secure compliance. Therefore, immigration, taxation, and cultural adaptation support may be granted in addition to other logistical relocation specific services (e.g. removal, temporary housing, home search, settling in, etc.).

Indubitably, the administration of an employee on a local contract will become easier than for international assignees retaining their home-country-based contracts. Indirectly, this set-up can therefore save administration costs, such as running two payrolls, double benefit payments, less tax work, and so forth, while eliminating some ongoing cost and administrative effort. However, international assignments are usually limited in time, whereas local contracts are often unlimited. Thus, higher local salaries and additional allowances and benefits are as unlimited as well. So, from a mid-to long-term perspective, real cost savings cannot always be expected from introducing local contracts for internationally mobile employees.

Talent Management Aspects

The employee’s individual and current employment situation and the company’s target with an employment abroad can be very different. In certain scenarios local employment will be the only option, whereas for others different options are more appropriate.

For what types of hires do companies use local or local-plus approaches - Mercer survey highlight

Internationally Hired Foreigners

If the candidate for a role is an international hire (i.e. a non-local employee who is hired internationally/outside the country of future employment), a local contract in the assignment country usually is the only option, at least from a legal perspective. If the candidate currently is an international assignee in the host country or has been internationally mobile for a few years performing international roles, their expectation may however be that not only a local salary is offered but a competitive salary, allowances, and benefits comparable and competitive to their current remuneration. In order to attract the talent, offering a local plus contract and remuneration package will also be in the company’s interest.

Permanent Transfers

If a current employee moves internationally, usually various options exist for managing it as an international assignment. However, if the move should be permanent because the employee wants to move to the host location for personal reasons (self-initiated move) or the role is moved permanently to the host location (company-initiated), again a local contract is the most appropriate choice. If such a move is self-initiated, a pure local contract should be offered with no or only one-off relocation support offered. If, however, the company wants to move the employee permanently, offering additional allowances and benefits should be considered. Distinguishing both scenarios can be tricky. If no job was available, how could the employee apply for a job abroad? And if the employee was not offered the job and had left the company in order to move to the desired location, would it not be in the company’s interest to offer the role to the employee who applied from abroad rather than losing the employee? These considerations often result in local plus contracts, allowing a win-win situation.

Other Cases

Local plus packages are also offered in certain locations or to certain position levels or after the maximum duration of an international assignment is reached. A local employment provides many and various challenges for the company and the employee. Those need to be balanced in the particular situation individually.

Challenges for the Company

The employee’s position in the host country needs to be evaluated appropriately. If the position level in the host country varies significantly from the home country, the employee’s positioning may be challenged by the employee and/or HR. A transfer, at least of statutory benefits, is usually not possible. Company plans may be transferred, depending on their set up. If any disadvantages for the employee have been identified, companies need to determine if and how such disadvantages should be compensated, potentially again adding additional costs.

Responsibilities have to be defined clearly and in a transparent manner. In order to secure internal compliance, the Global Mobility function may have a governance role also for local contracts in case they relate to cross-border employment. Furthermore, the function will be able to provide supporting data to HR and line management as well as to the transferring employee, e.g. cost of living, housing and education data, tax estimates etc. Global Mobility could also support with sourcing relevant providers.

If some pluses to the local contract are offered, for example, expat-like benefits such as housing and international schooling, a phase-out scheme should be defined, or such benefits could not easily be discontinued. The implementation and execution of such scheme will need to be governed thoroughly to avoid any unequal treatment and retention issues. Further challenges have been reported in Mercer’s 2018 Local Plus survey:

What aspects of local or local-plus compensation approaches do companies consider most challenging - Mercer survey highlight

Challenges for the Employee

The employee obviously does not have a guarantee to return to the home country, if they are locally employed. Disadvantages in their benefits may be generated and if a phase-out scheme is applied, any salary increases may be consumed by the decrease in the ‘plus’ benefits as long as the scheme is in effect.

Once the company changes its focus from temporary assignments to global career mobility and permanent transfers, and one-way moves become the norm, a clear career planning perspective will need to be added to the Global Mobility Policy and its execution. If such clear perspective is available and fully implemented in an organization, local contracts for cross-border employment can be a smart though not necessarily cheap solution. Local contracts often come with a plus for the employee and thus with higher cost as a true local employment. Local (plus) contracts for internationally mobile employees should be used wisely, considering the employee’s and the company’s interests, home-host combination, career planning, and overall direct and indirect costs.

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  • International Pay Structures: Why Are Companies Considering Them?
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Need help? Whether your organization is looking to create a global mobility program, enhance the one you currently have, or get answers to any issues or concern you're facing, we can help.

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  • SWITZERLAND

Working in Germany

Work contracts in germany (arbeitsverträge).

Work contracts in Germany (Arbeitsverträge)

You’ve found a job , made it through the interviews and been given an offer! But before you can start working in Germany , you will need to go through an employment contract with your new employer to confirm the details of your role.

Checking and signing your work contract ( Arbeitsvertrag )

Once you have accepted your new job, your employer will present you with a labour contract ( Arbeitsvertrag ) that covers all the details of your employment agreement. You do not need to sign this straight away. You are usually able to take it away and check it over, to make sure you understand and are happy with all the elements.

If there is anything you do not understand or are unhappy about, it is wise to discuss them with your company before you sign anything. Employment law in Germany can be complicated, so you may also want to consult a lawyer for advice.

German labour contract checklist

Your labour contract will detail various aspects of your employment. Check through it thoroughly to make sure there are no surprises. The most common elements included are:

  • Role description
  • Contract duration
  • Probation or trial period
  • Working hours
  • Additional benefits such as a company car or mobile phone
  • Holiday leave
  • Company pension scheme
  • Conditions of contract termination
  • Collective bargaining or company agreements (if applicable)
  • Working location & travel expectations (e.g. if working for an international company )

Types of employment contracts in Germany

There are several different types of employment contracts in Germany. Permanent employment contracts are by far the most common.

Permanent labour contract ( unbefristeter Arbeitsvertrag )

A permanent contract ( unbefristeter Arbeitsvertrag ) is for an unspecified, indefinite period of time. It will usually contain a six-month probationary period, after which your contract can only be terminated if you resign or the employer finds legal grounds to dismiss you (there are strict guidelines governing this).

Fixed-term labour contract ( befristeter Arbeitsvertrag )

Fixed-term labour contracts ( befristeter Arbeitsvertrag) are valid for a specific period of time. They may be renewed once this time period has elapsed, but the employer is not obliged to do so. A fixed-term contract can be renewed a maximum of three times, provided the total length of employment does not exceed two years.

If you have started your own business and have been running for less than four years, you can use fixed-term contracts for up to four years.

Contract with a recruitment agency

With this type of contract, you are employed by the recruitment agency ( Personalegentu r) rather than directly by the employer. The agency is therefore responsible for paying your salary. Temporary contracts of this type can only be for a maximum of 18 months, and you are entitled to the same remuneration and benefits as the customer company’s permanent employees.

Mini-jobs & Midi-jobs

Mini-jobs ( Minijobs ) are a form of marginal employment in Germany. A mini-job describes a work contract where the employee earns no more than 538 euros per month or works less than three months or 70 days per year ( Kurzfristige Minijobs ). Mini-jobs can be taken alongside your main job as a supplement to your wage, or as your principal form of income.

If you have a mini-job you are not liable to pay income tax or social security contributions  - which means you are not entitled to certain benefits like unemployment benefits , and you may end up with a low pension entitlement if you work a mini-job long-term - but you have the same employment rights as permanent employees, such as sickness benefit and holiday pay.

Midi-jobs (previously referred to as "sliding zone" jobs), are employment relationships in which an employee earns more than 538 euros but less than 2.000 euros per month (as of January 2023). Midi-jobs are subject to taxation and social security contributions, but at a discounted rate that gradually increases with earnings.  

Freelancer contracts

If you are a freelancer , you will typically draw up a contract with all of your clients to define your working relationships. In Germany there are two types of freelancer employment contracts:

Contract for services ( Dienstvertrag )

By signing a contract for services ( Dienstvertrag ), a freelancer makes their services available to the client in exchange for remuneration. The contract will usually detail any specific obligations, the length of the agreement and conditions for the contract termination.

Contract for (specific) work ( Werkvertrag )

A contract for work ( Werkvertrag ) differs from a contract for services mainly in that it concerns a specific work, rather than a period of time. The freelancer will undertake to produce or repair something, in exchange for a one-off fee. The service is usually only provided once.

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Tax risks arising from cross-border assignments

Many countries are imposing stricter regulations for foreign professionals

More and more employees are being sent on temporary foreign assignments by their companies, but fail to think of the tax implications. There are, however, many risks inherent in foreign assignments, explains Ulrike Hasbargen of EY.

For some time now, an international outlook has been a success factor for many companies. To defend their position in the increasing competition for new markets, customer groups and employees, companies have to measure up against their competitors not only at a national level but also at a global one. Consequently, a growing number of employees are being deployed around the globe by their employers as key contact persons to ensure efficient coordination between the headquarters and the foreign business operations or to gain international experience as part of a personnel development programme.

The most traditional and most common type of international mobility is known as expatriation (long-term assignments), where employees are typically assigned to a foreign entity for three to five years. However, use is increasingly being made of alternative forms of international mobility that may be categorised as short-term international assignments.

Many countries are imposing stricter regulations for foreign professionals and have now begun examining more closely even those foreign employees on short-term assignments to ensure they receive their share in taxes and social security contributions. In this respect, there is an increasing exchange of data between the immigration and tax authorities. One good example is the UK. The UK tax office wants to know exactly who enters the country to work, even if it is only for a short duration. Most of all, they want to know whether business visitors pay their taxes, either in the UK or in their respective home country. For this reason, the UK's tax authority (Her Majesty's Revenue & Customs (HMRC)) has issued new regulations to the agreement governing short-term assignments in the UK.

According to the Short-Term Business Visitors Agreement (also known as the Appendix 4 Agreement), wage tax must be withheld and payments reported on a monthly basis unless the company has a signed Short-Term Business Traveller agreement with the UK tax authorities. The prerequisites for such an agreement include, for example:

The assigned employee comes from a country that has signed a double tax treaty (DTT) with the UK;

The remuneration is not borne by the UK entity; and

An annual report is submitted to HMRC covering all employees who have been deployed to the UK for more than 60 days.

This means that the home companies will have to implement systems to monitor their employees' travel to the UK. Otherwise they are liable to tax withholding payments or other financial penalties.

As other countries also have strict requirements, companies are facing a major challenge in this respect. Obligations under residency and work permit legislation are being reviewed less thoroughly in the case of short-term assignees than in the case of long-term assignments. There are many reasons for this: short-term foreign assignments are often decided upon at short notice at the level of individual specialist departments, bypassing HR. This gives rise to considerable risks for the companies involved and their employees. However, in the meantime there is increasing awareness of the risks arising from short-term foreign assignments.

Various types of international mobile employees

p1.jpg

International work takes place in a wide range of activities. Due to the legal aspects mentioned above they need to be closely monitored, particularly since these kinds of short-term international activities are constantly on the increase. The most familiar type are project assignments of several months and traditional business trips abroad. When it comes to the latter, employees travel to another country on an ad hoc basis without a formal assignment. So-called international commuters travel across borders on a regular basis because the place where they live and the place where they work are in two different countries. In addition, foreign assignments as part of training and development programmes have now become quite common at international companies. Last but not least, multiple functions within a group also increasingly lead to regular cross-border working activities.   

Multiple functions

In addition to their primary activities for their employer from a legal perspective, executives often hold further operating functions for one or more group companies in other countries. At many companies, multiple functions are increasingly being planned for strategic purposes and implemented on a permanent basis. Due to the additional operating function for one or more group entities also outside of the home country, it is necessary to review whether such group entities qualify as an employer from an economic perspective. This may trigger a tax liability on the part of the employee in conjunction with duties to withhold tax and contributions on the part of the employer. To ensure compliance, it is necessary to implement cross-disciplinary processes and guidelines that include clearly defined responsibilities and lines of communication. Defining such responsibilities and procedures and the suitable degree of communication and intense collaboration between the specialist functions involved (specialist department, HR, tax, legal, controlling, finance) is decisive.

One risk group that is increasingly attracting attention are business travellers. Data collection is a fundamental challenge here. The information relating to the travel activities of employees working internationally is often spread around the company. Some employees record their travel activities on a voluntary basis, others are instructed to do so by their supervisors or HR departments. Some companies are using a centralised system to record and monitor business travellers.

183 day regulation: Correct application

Countries justify their right to taxation by the fact that the work is performed in their territory. To avoid double taxation in the home country as well as the host country, there is usually a regulation contained in the DTT based on Article 15 of the OECD model convention.

Generally speaking, the right to tax income from dependent employment is allocated to the country of residence of the employee on assignment, unless the place of work or source state principle applies. In this respect, it is necessary to first clarify in which country the employee is deemed resident, whether residency was relinquished during the short-term assignment or whether the employee is deemed resident in both the home and the host country.

Once home and host countries have been defined, a review is performed in a second step to determine which country is attributed the right to taxation for which income. Pursuant to Article 15 of the respective DTT, the right of taxation may only revert to the country of residence if all of the following three criteria are met:

The employee does not spend more than 183 days in the host country within a given 12-month period as defined in more detail in the applicable DTT; and

Remuneration is paid by, or on the behalf of, an employer that is not a resident of the host country; and

The remuneration is not borne by a permanent establishment (PE) of the employer in the host country.

The term '183 day regulation' has established itself as the measure for such situations. Consequently, many people only look at the 183 day threshold and do not sufficiently review the other two aspects. This can have costly consequences, however: if the employer or a permanent establishment is located in the host country (that is, criteria 2 and/or 3 are not met), the employee on assignment will be liable for tax on income from employment from the very first day in the host country.

Even the method of counting the 183 days is often a challenge. DTTs may refer to three different twelve-month periods: the tax year, the calendar year or any twelve-month period beginning or ending in the tax year in question. The tendency is to apply a discretionary twelve-month period. This makes forward planning of foreign assignments all the more important. When prescribed periods are exceeded, retroactive taxation becomes necessary, which is often not easy to comply with and may lead to double taxation.

Additional attention is necessary in case of board members, managing directors and individuals having power of procuration. In these cases some DTTs allocate the right of taxation to the country of the management of the company, irrespective of working days in this country.

Who is the employer?

The OECD model convention does not contain a definition of its own. The term employer is to be interpreted primarily according to the sense and purpose and in the context of the convention and only secondarily according to national tax law. But even this is difficult. Even if the legal employer remains in the home country, there may be an economic employer in the host country.

This blurring can lead to different interpretations by the countries involved. For this reason, the OECD has reworked its model commentary. According to the OECD commentary, it is only possible to reinterpret the legal employment relationship under certain circumstances. For example, the host company generally becomes the employer when the employee performs essential tasks for that company, for which that company assumes responsibility and the risks arising from which it is willing to assume (integration test). Further decisive factors are which company has the right to issue instructions to the employee and who, from an economic perspective, bears (or should have borne) the cost of remuneration.

Finally, from a German perspective, it is of special importance who actually bears the expense of the wages according to the general regulations on the allocation of profit between affiliated companies or should have done so applying the pertinent arm's-length principles. In the case of an assignment to Germany of more than three months, the German tax authorities generally work on the rebuttable presumption that the assigned employee is integrated into the host company in the host country and that the latter thus qualifies as economic employer. Consequently, the employee becomes liable to tax from the first day of employment in Germany onwards, even if the employee is there for less than 183 days. Companies whose employees are only briefly in Germany should, in the case of more than three months, be able to clearly document why the employee is not integrated into the German company.

Permanent establishment risk

Foreign assignments of employees give rise to the risk for employers establishing a PE in the host country. Especially in emerging economies, the tax authorities are increasingly attempting to construct a PE of the assigning company from the activities in the host country. Even if there is already a foreign subsidiary in place, additional PEs for tax purposes may arise in the same country.

p2.jpg

The first issue to be clarified is always whether the work performed by employees abroad constitutes a PE as defined by the relevant DTT. The definition contained in the respective treaty is definitive for the term permanent establishment (cf. Article 5 OECD-MC).

For example, protracted on-site assembly work abroad may mean that companies form what is known as a permanent establishment for assembly purposes. This affects, for example, German companies that build turn-key facilities abroad in the capacity of general contractor. In the case of assembly work, office containers may constitute a fixed place of business as defined in Article 5 (1) OECD-MC from which the business operations of the company are performed. If there is no fixed place of business, the criteria for a PE for assembly purposes as defined in Article 5 (2) OECM-MC will have to be reviewed. According to that article, a construction or assembly site only becomes a PE after a period of more than twelve months; this is the case for example in France, the UK, South Korea, Italy and Poland. In China, India or Mexico, in contrast, exceeding a six-month period is sufficient for a PE for assembly purposes to be formed. Some countries provide for a nine-month period.

In China, a PE for the provision of services can be formed even by the rendering of services over a period of more than six months. The remuneration for the days worked in China attributable to the PE are all subject to taxation in China. Even in cases where the salary expenses are cross-charged to the Chinese entity with a markup, there is an increased risk of the existence of a PE in China being assumed due to the deployment of employees. Similarly, mobile sales staff with de facto power to sign contracts may postulate a PE for sales representatives of the company assigning them to the host country.

The assumption of the existence of a foreign PE has considerable tax implications. The assigning company becomes subject to limited tax liability under the respective national tax law with regard to the income attributable to the PE from an economic perspective. Any profit generated by the PE in this country must be taxed in the host country. The 183 day rule would not apply to the assigned employee, which means that the employee may be subject to personal income tax liability from the very first day of work in the country where the PE is located.

Assigning responsibility

All these risks underscore the necessity of proceeding in an organised manner when it comes to short-term international activities and responsibilities. In-house regulations and processes help to maintain an overview and to comply with various legal systems. In many cases, the various corporate functions – whether HR and tax departments or line managers – that send employees on foreign assignments are themselves aware of the associated risks. However, responsibilities are often insufficiently defined.

p3.jpg

The international HR department working together with the tax department should take the lead here and, as a first step, communicate to all stakeholders involved the necessity of a structured solution for short-term foreign assignments and international activities and responsibilities. Inter-departmental cooperation is essential. Both the specialist and operating departments as well as the internationally working employee are responsible for achieving the path to compliance.

  

Internal guidelines for short-term foreign assignments and international activities that trigger tax in various countries are recommendable for all agreements and decisions relating to responsibilities, recording travel data, communication and processes. These guidelines must clarify the following issues:

Which employees are covered? (This often defines threshold values. For example, all employees anticipated to be traveling for at least 30 or 90 days to a specific country are covered).

How is this data recorded? (For example, by the employees themselves using Excel lists or using a central tracking system or with the assistance of a central travel booking office)?

When is which information conveyed to which responsible office (for example, international HR department)?

In this respect, it is necessary to make the specialist and operating departments and the employees themselves responsible for compliance with the policy.

Interdepartmental cooperation is central to successful management

The challenges and risks of cross-border foreign activities are manifold and complex. Companies still do not pay sufficient attention to short-term foreign assignments and activities. This gives rise to compliance risks of a corresponding magnitude. Monetary fines, withholding requirements and damage to reputation can be incurred. The management of international activities requires a structured interdepartmental cooperation between HR, tax, operating departments and employees. Only when responsibilities have been clearly defined and processes and transparent policies have been put in place, will it be possible to manage short-term assignments and international activities properly.

This article is an abridged version of a German article that was published in the Tax & Law Magazine 2014Q1. The article includes findings of the EY Global Mobility Effectiveness Survey. The most recent 2013 survey can be found at www.ey.com/GL/en/Services/Tax/Human-Capital/Global-Mobility-Effectiveness-Survey-2013 .

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An Employer’s Guide to Expat Benefits & Compensation

When a first-time, or returning, expat is sent internationally to complete an assignment, there are questions that may seem difficult to answer. An employer might be questioned about the competitiveness of what’s on offer, or whether it’s even attractive enough for employees.

Consider, for example, the following: 

  • Are your expat benefits benchmarked competitively?
  • Should salary and compensation reflect the host country’s expectations?  

When growing companies send staff abroad on international assignments, a level of negotiation is often needed when it comes to agreeing compensation and benefits. It’s important that employees are properly incentivized and rewarded, however such arrangements also must make financial sense for the company.

Read on to find out about best practices and what might be expected when it comes to expat benefits and compensation.

Agreeing Expat Benefits and Compensation

Usually, when a business decides to expand internationally, it’s useful to expatriate existing employees to ‘set up shop’ or establish a business in a foreign market. This is because these employees will already be familiar with the way the company works, as well as its ethos and goals.

When approaching staff for an international assignment, business leaders need to ensure they properly incentivise the move for the best outcomes. Whilst some employees may look upon expatriation favourably, others may have reservations unless the offer is attractive enough. This is especially so if the employee(s) have dependants and other commitments outside of work, such as schooling considerations or are anxious about housing opportunities.

Employers should consider the following allowances when it comes to international relocation:

  • Housing opportunities
  • Education opportunities
  • Driving and transport options
  • Travel practicalities and expenses

In either case, it’s important for employers to understand that the opportunity to move and work abroad is a substantial one for any employee.

To properly incentives and benchmark employee relocation, careful consideration should be given to expatriate benefits and compensation. Business leaders need to offer an appropriate salary, cover the costs of relocation, and include various other employee benefits in an expat package (including any tax complications).

Importantly, any agreements should be made in negotiation between employee and employer.

Finding the Right Expat Benefits

While a competitive salary and the cost of relocation should be simple enough to determine, expatriate benefits can be somewhat more complicated to agree on and arrange. This is partially because expatriate benefits will need to be flexible enough to work compliantly and competitively in different locations across the globe. 

Compliance should prioritize which benefits are offered in the first instance. A host country may have different employment laws from the location where a business is headquartered, so benefits will need to carefully negotiate both compliance and employee expectations.

Certain employee benefits may not always work as expatriate benefits. Examples of this include:

  • A company car

This would only be useful if the expatriated employee is confidence enough – and legally able – to drive in their new country. Where this is not the case, access to a personal driver, or public transport passes may be more useful.

  • Private healthcare

In the US, many companies offer access to private healthcare as an employee benefit. In many European countries, however, this is not worthwhile because all residents have access to public healthcare, which is of high quality.

Other expatriate benefits are, on the other hand, considered more desirable. Those include:

  • Overtime pay

Where in the US many states do not require employers to offer staff overtime pay, in other countries this may be expected, or even lawfully compulsory.

  • Language classes

If employees are being expatriated to a country where they do not speak the language, offering access to language classes as a benefit can help them to properly integrate into society.

Expectations Among Expat Communities

There are many parts of the world in which expatriated employees are more common, and often communities around expat lifestyles start to develop here. Exposure to these communities could be valuable, as employees become less isolated in their new roles and have local reassurance from a similar type of worker.

But benchmarking benefits and compensation is critical in ensuring that these remain competitive and that employees are satisfied.

Common Places for Expat Assignments

The following is a list of the biggest expat communities across the world, according to International Money Transfer .

  • Toronto, Canada
  • Chiang Mai, Thailand
  • Brussels, Belgium
  • Sydney, Australia
  • Berlin, Germany
  • Los Angeles, USA
  • Amsterdam, The Netherlands

When a business expands into one of these areas, it can be beneficial for company representatives to do their homework. It’s advisable to research the types of expatriate benefits that other companies are offering their staff. In addition to relocation costs, any of the following could be common expatriate benefits in these locations:

  • Education for dependants
  • Healthcare and dental
  • Cultural training
  • Health & fitness memberships
  • Electronic devices (mobile phone, laptop, etc)
  • Regular bonus

In addition to finding out which types of expatriate benefits are often seen in the new location; business leaders also need to make sure they are fully compliant with the employment law in that location. When it comes to benefits, there are some which may be legally compulsory – such as overtime pay – and others which may need to be reported to the local tax jurisdiction.

Achieving Compliance

The most reliable way for a business to ensure they achieve compliance with HR and payroll law in a new location is to procure the services of an experienced team. The experts at IRIS FMP have experience in navigating employment legislation all over the world, and we know how to make sure your company operates well within the law.

The two main considerations regarding compliance when it comes to expatriate benefits are:

  • Offering lawfully compulsory benefits
  • Reporting benefits to the tax jurisdiction

Offering Lawfully Compliant Benefits

All over the world there are different employee benefits that must be offered by companies operating in certain countries. Getting familiar with employment law in a country where you intend to expand your business is vital but can seem like a daunting undertaking. See our individual in-country guides as a starting point.

Compulsory benefits that may need to be offered, in spite of what is usually offered in the company’s origin country, include:

  • Holiday leave and pay for a specific number of days
  • Sick leave and pay for a specific number of days
  • Parental leave and pay for a specific number of days
  • Time off to take care of parents or dependants

Reporting Benefits  to the Tax Jurisdiction

Employment law in different countries may also stipulate that some expatriate benefits need to be reported for tax purposes. The reason for this is because employees and/or employers may need to pay tax on these benefits.

Examples of this include in the UK, where the following benefits need to be  reported to HMRC :

  • Health insurance
  • Company cars

And in the US, where the following need to be included on employees’ annual W – 2 Wage and Tax Statement :

  • Car allowance
  • Education allowance
  • Host country housing costs
  • Utility bills

Payroll teams in expanding companies need to keep track of all expatriate benefits issued, and determine when and if they should be reported, and to whom.

Offering the right expat benefits and compensation to staff on international assignments is an important part of ensuring business expansion is successful. The reason for this is because only with appropriate expat packages will employees feel valued and fully supported. Employees who feel like this will then feel more inclined to deliver their best work, allowing the new company branch to thrive.

For all the advice you need regarding expat benefits and compensation , and supporting staff on international assignments, get in touch with IRIS FMP.

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GPIL – German Practice in International Law

International agreements concluded by Germany in 2021

Published: 11 January 2022 Authors: Stefan Talmon and Zoé Flöer

In 2021, Germany signed some 80 bilateral agreements. By far the most bilateral agreements were concluded with the United States concerning the exemption and benefits of US enterprises serving US troops in Germany under the Supplementary Agreement to the NATO Status of Forces Agreement. In addition, Germany concluded some 12 multilateral treaties during that period and signed numerous non-legally binding international agreements such as Memoranda of Understanding and Declarations of Intent. The following is an incomplete list compiled from public sources:

Bilateral treaties

Multilateral treaties

Non-legally binding international agreements

DOI: 10.17176/20220627-172603-0

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International assignments at Bosch – Preparing for work abroad

international assignment to germany

Important points to keep in mind

  • Preparatory seminars help combat culture shock
  • Guaranteed return to home country and job are factors for success
  • Chief personnel officer: “International assignments create associate networks”

At Bosch, the supplier of technology and services, several thousand associates also work abroad each year in regional subsidiaries around the globe. In 2012, more than 5,600 associates were on assignments outside their home countries. To help associates settle into their new cultures and to facilitate their re-integration into their home countries, systematic support before, during, and after the assignment is important.

“Right from the beginning of their time abroad, associates should start thinking about their return,” says Andreas Bäuerle, who is in charge of international assignments at Bosch. “This explains why our international assignments are limited to four years. Moreover, our associates receive a guarantee that they will be able to return to a job in the company that sent them abroad.”

An poorly prepared return often means dissatisfied associates. In some cases, they may even change employers shortly after returning. At Bosch, by contrast, the rate of turnover one year after the end of an international assignment is very low. The number of people who end their assignments prematurely is likewise under one percent. According to the HR expert Bäuerle, associates who want their long-term assignment to be successful should pay particular attention to the following points:

  • Pre-assignment talk: Two to four months before the assignment, its labor-law, tax-related, and financial aspects should be discussed. The associate’s partner should also be involved in the discussion, particularly when they also intend to find work abroad. The company can often help its associates’ partners in this respect.
  • Reconnaissance trip: This gives associates the chance to get to know their new place of work, new city, and new country together with their partner. The associated costs are usually paid by the company.
  • Intercultural preparatory seminar: This prepares associates and their partners for the new culture, its lifestyle, and its idiosyncrasies, and makes it easier to overcome any culture shock.
  • Language course: These help associates and their partners integrate into their new surroundings better, also in their private lives.
  • Mentoring program: A mentor from a higher hierarchical level supervises the associate and supports them on their return. He or she also helps with the internal job search ahead of time.
  • Network: Future expatriates can benefit from the country-specific expertise of associates who have completed international assignments. The exchange of experience is useful for preparation and for re-adjustment.

International assignments encourage diversity and networking At Bosch, international assignments are a key element of HR policy. The cross-border exchange that happens when associates are sent abroad helps to facilitate two-way knowledge transfer between the regions. “International assignments play an important role in networking our associates. They also help us see things from different perspectives,” says Christoph Kübel, member of the board of management and director of industrial relations at Robert Bosch GmbH. “This global knowledge transfer and intercultural exchange are part of our program to promote the diversity we need as a seedbed of new ideas.”

International experience as career stepping-stone The majority of executives at Bosch have spent at least two years abroad over the course of their careers. But shorter assignments are also attractive for both employers and employees. Last year, Bosch sent some 2,900 associates on short-term assignments, which last between approximately three and twenty-four months. An assignment abroad is one of five career stepping-stones which executives must fulfill in order to reach the next hierarchical level. International assignments have a long tradition at Bosch. As early as 1905, when the first Bosch manufacturing facility outside Germany was established, senior engineers came from Paris to Stuttgart in order to transfer knowledge and the corporate culture to the French location.

Internet: Bosch as employer: http://your.bosch-career.com Go abroad with Bosch: http://bit.ly/19dkb1o

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Handbook of Human Resources Management pp 951–974 Cite as

Compensation and Benefits: Essentials of International Assignment Management

  • Juergen Czajor 2  
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  • First Online: 28 April 2016

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Internationalization became an essential strategic dimension for companies to ensure profitable growth. International assignments play an important role to implement this strategy. As a consequence the number of international assignees is growing year by year; they work as interface manager between headquarters and branch office, as cultural ambassador, or as technical specialist to transfer knowledge. For ambitious and open candidates, a position in a foreign country and in a different culture can be an interesting step to further develop their professional career. International assignment management first of all needs a policy framework, defining the compensation and benefit package, especially the typical assignment allowances depending on distance to the home country and hardship of the host country. The administration of international assignments secondly requires standardized processes for all phases of an assignment, from selection to reintegration and with clear allocation of roles and responsibilities between all human resources partners involved. Organizations exchanging bigger numbers of specialists and executives between several countries work with centralized assignment management teams, who cooperate with local HR in the host countries and often use external partners for relocation, social security, payroll, and taxation to manage this complex task.

  • Going global
  • Global mobility
  • International assignment management
  • International career
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Deutsche Industrie- und Handelskammer in Japan (DIHKJ) –Auditor – (2007) Expatriate versus Local, Vor- und Nachteile von Expatriates in japanischen Tochtergesellschaften deutscher Unternehmen. http://japan.ahk.de

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Weber S (2010) Implementierung westlicher Standards an einem neuen Unternehmensstandort als Voraussetzung fuer den internationalen Mitarbeitereinsatz. Diploma thesis at Hochschule Pforheim

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Czajor, J. (2016). Compensation and Benefits: Essentials of International Assignment Management. In: Zeuch, M. (eds) Handbook of Human Resources Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-44152-7_73

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Zolan Kanno-Youngs reported from Washington and David E. Sanger from Berlin.

President Biden and Chancellor Olaf Scholz of Germany used a meeting at the Oval Office on Friday to pressure Congress to pass billions more in aid for Ukraine, as legislative dysfunction and opposition among some Republicans have left the critical package in limbo.

“Hopefully Congress, the House, will follow you and make a decision on giving the necessary support because without the support of the United States and without the support of European states, Ukraine will not have a chance to defend its own country,” Mr. Scholz said in opening remarks before their meeting.

Mr. Biden had a more blunt assessment of the congressional gridlock.

“The failure of the United States Congress, if it occurs, not to support Ukraine is close to criminal neglect,” Mr. Biden said. “It is outrageous.”

The joint pressure amounted to another maneuver in the high-stakes battle over funding for Ukraine as it tries to fight off Russia’s invasion, a debate that could ultimately help determine the course of the war and, much of Europe worries, security across the continent.

The message comes after Senate Republicans blocked a broad bipartisan deal this week that would have provided billions in funding for Ukraine and Israel, as well as stringent restrictions at the U.S.-Mexico border. Senators are now inching ahead with legislation would provide $60.1 billion for Ukraine, $14.1 billion for Israel and $10 billion in humanitarian aid for civilians in global conflicts.

Senators were planning to work into the weekend on the bill, and it appeared to be on track for passage in the Senate within days. But it faces stiff opposition from many Republicans in the G.O.P.-led House.

The White House has argued that the aid is necessary for Ukraine to continue to defend itself.

Ukraine would not immediately lose the war without the U.S. aid, according to analysts, but it would most likely lose out on stockpiles of weapons and ammunition it has relied on. The United States has provided about half of the foreign military assistance to Ukraine so far, roughly $47 billion.

“That is why we are both firmly convinced that this must happen now, but also confident that the American Congress will ultimately” pass the funding, Mr. Scholz told reporters at the White House after the meeting with Mr. Biden. “That is also the right message to the Russian president, that his hope is in vain that he simply has to wait long enough” for Ukraine’s allies to lose enthusiasm for continuing to support it.

The European Union passed about $54 billion in aid earlier this month that will cover pensions, payments to people displaced by war and routine outlays such as salaries for teachers and doctors in Ukraine.

After initially expressing skepticism about evidence the United States and Britain presented in early 2022 that Russia was preparing to invade, Germany has emerged as one of the largest financial contributors to Ukraine’s war effort, and to its nascent rebuilding effort. The nation has cut off gas supplies from Moscow and imposed sanctions.

But the political cost for Mr. Scholz has been high. Germany has long been accustomed to being the economic engine of Europe, but last year its economy shrank 0.3 percent, and roughly the same performance is expected in 2024. The cost of the Ukraine war and China’s economic problems — which have hit the auto and manufacturing sectors the hardest in Mr. Scholz’s country — have exacerbated the problem.

Mr. Scholz’s approval ratings have plunged, and some pundits predict that right-wing parties will do better than ever in recent times in elections later this year.

So Mr. Scholz, a cautious labor lawyer from Hamburg, is carefully trying to ease the pain among German voters and avoid a major public debate over military spending. But he has said he is not backing down on what, after the invasion of Ukraine, he termed “Zeitenwende,” or a “turning point” for Germany.

Mr. Biden, too, has seen his public standing on the war effort decline as more Americans, and more Republicans in Congress, have expressed opposition to continued aid. But he has argued that turning away from the conflict is exactly what President Vladimir V. Putin of Russia wants.

“We can’t walk away now,” he said in a speech aimed at lawmakers this week.

Steven Erlanger contributed reporting from Berlin, and Karoun Demirjian from Washington.

Zolan Kanno-Youngs is a White House correspondent, covering President Biden and his administration. More about Zolan Kanno-Youngs

David E. Sanger covers the Biden administration and national security. He has been a Times journalist for more than four decades and has written several books on challenges to American national security. More about David E. Sanger

Our Coverage of the War in Ukraine

News and Analysis

Ukrainian troops have withdrawn from the eastern frontline city of Avdiivka , allowing Russia to score its biggest battlefield victory in months  and dealing a blow to Ukraine’s stretched and outgunned forces .

Speaking at the Munich Security Conference, President Volodymyr Zelensky of Ukraine called on world leaders not to abandon his country and pushed back against the idea of a negotiated resolution to the war .

As a bill with $60.1 billion in military aid for Kyiv languished in the House, the Biden administration blamed Congress for Ukraine’s withdrawal from Avdiivka .

Wounded Soldiers: The number of Russian troops with amputated limbs or serious injuries is believed to be staggering . When these veterans return home, they face a patchwork system of treatment and, often, efforts to keep them out of the public eye .

Creative Use of Weapons: Ukraine’s use of a Patriot missile to take down a plane in January is an example of how novel battlefield tactics can be fraught with peril as well as promise .

Broadcasting Rage: Residents of the battered Ukrainian city of Kharkiv turn to a station called Radio Boiling Over to vent their anger at Russian attacks .

Reined In: Ukraine’s oligarchs have lost billions from the shelling of their factories. Now the government hopes to break their political influence .

How We Verify Our Reporting

Our team of visual journalists analyzes satellite images, photographs , videos and radio transmissions  to independently confirm troop movements and other details.

We monitor and authenticate reports on social media, corroborating these with eyewitness accounts and interviews. Read more about our reporting efforts .

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Tin Mill Products from Canada, China, and Germany Do Not Injure U.S. Industry, Says USITC

The United States International Trade Commission (USITC) today determined that a U.S. industry is not materially injured or threatened with material injury by reason of imports of tin mill products from Canada, China, and Germany that the U.S. Department of Commerce (Commerce) has determined are sold in the United States at less than fair value and subsidized by the Government of China. 

The Commission further found that the imports of these products from South Korea that Commerce has determined are sold in the United States at less than fair value are negligible and voted to terminate the antidumping duty investigation concerning South Korea.

Chairman David S. Johanson and Commissioners Rhonda K. Schmidtlein, Jason E. Kearns, and Amy A. Karpel voted in the negative with respect to the antidumping and countervailing duty investigations for Canada, China, and Germany. They made a finding of negligibility with respect to the antidumping duty investigation involving South Korea.

As a result of the Commission’s negative determinations, no antidumping and countervailing duty orders will be imposed on imports for Canada, China, and Germany. As a result of the finding of negligibility, the antidumping duty investigation regarding imports from South Korea will be terminated.

The Commission’s public report Tin Mill Products from Canada, China, Germany, and South Korea  (Inv. Nos. 701-TA-685 and 731-TA-1599-1601 and 731-TA-1603  (Final), USITC Publication 5492, February 2024) will contain the views of the Commission and information developed during the investigations.

The report will be available by March 13, 2024; when available, it may be accessed on the USITC website at:  https://www.usitc.gov/commission_publications_library .

UNITED STATES INTERNATIONAL TRADE COMMISSION Washington, DC 20436

FACTUAL HIGHLIGHTS

Tin Mill Products from Canada, China, Germany, and South Korea Investigation Nos. 701-TA-685 and 731-TA-1599-1601, 1603 (Final)

Product Description:  The products covered by these investigations are tin mill flat-rolled products that are coated or plated with tin, chromium, or chromium oxides. Flat-rolled steel products coated with tin are known as tinplate. Flat-rolled steel products coated with chromium or chromium oxides are known as tin-free steel or electrolytic chromium-coated steel. The scope includes all the noted tin mill products regardless of thickness, width, form (in coils or cut sheets), coating type (electrolytic or otherwise), edge (trimmed, untrimmed or further processed, such as scroll cut), coating thickness, surface finish, temper, coating metal (tin, chromium, or chromium oxide), reduction (single- or double-reduced), and whether or not coated with a plastic material.

Status of Proceedings:

  • Type of investigations: Final countervailing duty and antidumping duty investigations. 
  • Petitioners: Cleveland-Cliffs Inc., Cleveland, Ohio; and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union ("USW"), Pittsburgh, Pennsylvania. 
  • USITC Institution Date:  Wednesday, January 18, 2023.
  • USITC Hearing Date:  Thursday, January 4, 2024.
  • USITC Vote Date:  Tuesday, February 6, 2024.
  • USITC Notification to Commerce Date:  Monday, February 26, 2024.

U.S. Industry in 2022:

  • Number of U.S. producers:  3.
  • Location of producers’ plants:  California, Indiana, Ohio, and West Virginia.
  • Production and related workers:  1
  • U.S. producers’ U.S. shipments:  1
  • Apparent U.S. consumption:  1
  • Ratio of subject imports to apparent U.S. consumption:  1

U.S. Imports in 2022:

  • Subject imports:  1
  • Nonsubject imports:  1
  • Leading import sources:  Canada, Germany, Netherlands.

1 Withheld to avoid disclosure of business proprietary information.

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