International

SBAL has been rendering tax advisory services to seconded employees for a long time, by effectively and comprehensively implementing the most suitable treatment, and by troubleshooting all those incidents that may arise as a result of their secondment.

We rely on a wide network of highly qualified collaborators, and all the specificities of each discipline and of each destination are addressed together with them in a coordinated, agile and responsive way.

As far as migration issues and relocation are concerned, we are assisted by a leading company in the sector “Employee Mobility Solutions” (EMS, for short).

Our competitive and customized package of tax advisory services for employees seconded to a foreign country includes the following, among others:

• Situation analysis, diagnosis of the potential contingencies and the making of the relevant recommendations so as to guarantee compliance with the law, but also in order to avoid potential risks and optimize both individual and corporate taxation.
• Design of the company’s policy in relation to long-term and short-term seconded employees, tax equalization, action-s to be taken and optimal tax treatment.
• Provision of advice to the company about expatriation terms and conditions, tax status of the seconded employee, tax treatment as far as withholdings are concerned, both as a tax resident (i.e. Resident’s Personal Income Tax) or as a non tax resident (i.e. Non-resident Income Tax) and, where appropriate, application of the Personal Income Tax fiscal benefits (e.g. exemption of employment income arising in a foreign country, excess allowances or per diem allowances) or enforcement of the regulations on Non-resident Income Tax.
• Provision of advisory services on tax treatment in the host country, by taking into account the different salary items agreed upon in the particular case of each of the employees seconded to a foreign country, on the basis of the host country and the seconded employee professional profile, but also considering whether local hiring is required or not. Gross amount assessment, should there be a guaranteed net salary and benefits package.
• Direct communication with the seconded employee, in order to explain him / her taxation in both Spain and the host country, and to solve all those doubts, deal with all those formalities and resolve all those incidents that might arise in relation to his / her new tax status in both countries.
• Provision of assistance in the seconded employee’s host country, so as to enroll him / her in the taxpayer census, to obtain tax residence certificates in that country and also to prepare his / her income tax return.
• Mandatory communications in Spain and preparation of the seconded employee’s Non-resident Income Tax returns or Personal Income Tax returns, as appropriate, depending on tax residence definition.

Expatriate tax treatment
Double Tax agreements
Tax Glossary

SBAL recommends all its clients to properly approach taxation of their international transactions, in order to prevent unexpected contingencies or costs, and also to optimize the tax impact of their international projects.

We have a network of highly qualified collaborators, and all the specificities of each discipline and of each host country are addressed in collaboration with them in a coordinated, agile and responsive way.

The tax advice that we render in relation to international transactions includes the following, among others:

• Diagnosis of the tax liabilities that the project might result in, specially at the host country, due to the imposition of direct taxes (i.e. as a result of the existence of either a permanent establishment or withholding at source) or due to the levy of indirect taxes, customs duties or excise taxes or because of the taxation of seconded employees pursuant to the Double Tax Agreements in force, the local regulations and practices.
• Design and formation at the host country of the most suitable corporate structure, that is to say, an affiliated company, a permanent establishment or a branch office.
• Planning of the design of the “Off shore” / “On shore” project scope, in the light of the transaction economic backdrop, INCOTERMS, delivery terms and conditions and, of course, by taking tax implications into account.
• Project analysis and diagnosis of whether any withholding at source might exist, the percentage and the likely formalities to be carried out for its limitation on the grounds of the existence of an International Agreement.
• Analysis of the length of the stay at the host country required by the Project, as well as any other circumstance whatsoever that might determine the existence of a permanent establishment in the host country.
• Analysis of the advantages and drawbacks of the different types of associations / partnerships in international projects together with their potential implications.

Double Tax Agreements
Tax Glossary