Show NotesOn this episode of The View from The Top we met Yuki Watanabe (Gap) and Andrew Walker (EY). Yuki and Andrew are two of the most highly respected global mobility professionals in the world today. Both feature on The Top 100 list and Andrew is also chairman of Worldwide ERC.
Yuki has been in the Mobility industry for over a decade and is the Director of Global Mobility and Immigration for Gap, Inc. where she has ownership over their US and cross-border immigration, taxation, and relocation programs in support of Gaps’ strategic global talent vision.
Andrew serves as the Global Mobility and Talent Reward Leader with EY and has more than 25 years of experience in global human resource program management with a focus on international compensation and benefits, and employee mobility. He has served on several advisory boards and is presently an Executive Committee member of the Board of Directors at Worldwide ERC. He is a frequent speaker at conferences and industry events and has been quoted in The New York Times, The Wall Street Journal, BBC news, MOBILITY magazine, among other prestigious publications.
We talked with Yuki and Andrew about the similarities and differences between mobility programs between East and West coast and by different business industries?
The consensus of the day found that overall policies on each coast found that the company culture took precedence over any geographical nuances though the west coast was more a bit more innovative and less rule strict. Regardless of coast, business or program size, both Yuki and Andrew found that their programs are a mix between still mitigating through the pandemic but are coming out of a recovery mode into having their volumes pick up slightly as volumes start to move toward 2019 numbers.
Watch the video of the show to hear more about Yuki and Andrew’s conclusions on work from anywhere and how employers are handling remote work policies and adjusted compensation, cultural training, and more.
Immigration UpdateBy Julia Onslow-Cole at Fragomen
1. We would like to give our condolences to everyone on the sad news today, 24th March, that the Deputy Ruler of Dubai, His Highness Sheikh Hamdan Bin Rashid sadly pass away. He will be remembered for many great achievements.
2. His Highness Sheikh Mohammed, the Ruler of Dubai and Prime Minister of the UAE announced some significant changes to the remote working visa and visit visa categories this week.
3. The Remote working visa is now available not only in Dubai but across all the Emirates. Applicants must be earning at least US$5,000 per month and be employed or self-employed outside the UAE. Permission is given for an initial period of 12 months.
4. A potential 5-year self-sponsored visit visa was announced for all nationalities wishing to visit Dubai.Tax UpdateBy Pat Jurgens at AIRINC
United Kingdom tax developments
- On March 3rd, the Finance Minister Rishi Sunak presented the UK Spring Budget. Fortunately for global mobility, there are no major individual income tax developments.
- The biggest tax change is the corporate tax rate for companies with taxable profits over GBP 250,000 - increasing from 19% to 25% to help with public finances. This corporate tax increase is scheduled to be implemented April 6, 2023.
- For the upcoming tax year beginning April 6, 2021 – For individual taxpayers, there are small inflation adjustments to the tax brackets, personal allowance, and the national insurance thresholds. The tax rates are unchanged with a top rate of 45% and NIC at 12% and 2%. Notably, these thresholds will then be frozen for the next 5 years. Effectively, this is potentially a small tax increase over that 5-year period assuming the erosion of income due to inflation.
- And in related news, an update on social security and Brexit. All 27 EU countries have now ‘opted-in’ to the “Detached Worker” provisions of the new social security protocol. Individuals posted between UK and EU for up to 24 months (maximum term) will still be able to obtain an A1 Certificate allowing continued coverage in their home country social security scheme. Applies to both employee and employer contributions. NON-EU countries are excluded from the new rules – Switzerland, Norway, Iceland, and Liechtenstein.
United States – ‘American Rescue Plan’ tax changes
- Today March 10th, the House is scheduled to vote on the Senate version of the American Rescue Plan. There are many provisions, including COVID vaccine funding, funding for state and local governments, rental, and housing assistance.
- Key takeaways – Parents and especially parents of young children at lower incomes will benefit the most from the Rescue Plan. Also, the plan relies on the tax system and the IRS to distribute the money.
- Has implications for global mobility programs, and how to handle these payments from a tax policy perspective – some inbound assignees will get payments they are not entitled to. Should you collect them from the employee? Outbound assignees may not get the correct amounts due to assignment-related income. Consider an effective communications program to your assignees on what your plans are these IRS payments.
- The headline tax development in the bill is the third Stimulus payments to qualifying individuals:
- These are set at $1,400 per person, $2,800 for a couple, plus $1,400 per qualifying dependent. To qualify, everyone must have a Social Security Number.
- This will be the third stimulus payment – the first two occurred in 2020 and are reported on the 2020 tax return. The third will be reported on the 2021 tax return.
- The threshold for qualifying for the payment has been reduced. There will be some individuals that received stimulus payments in 2020 that will not qualify for the third. Income thresholds are:
- SINGLE: Threshold was $100,000 and is now down to $75,000 and fully phased out at $80,000.
- JOINT: Threshold was $200,000 down to $150,000 and fully phased out at $160,000.
- Qualifying individuals must have a Social Security Number to qualify for the stimulus payment. Older children (dependent college students) and older dependent relatives now also qualify.
- The IRS will use the most recent tax return submitted to determine how much the stimulus check will be – Tax year 2019 or 2020 depending on how quickly the taxpayer has filed returns.
- It is expected the checks will go out probably late March or early April.
- Stimulus payments are not taxable income but will need to be reported on the 2021 tax return. If the individual did not receive a payment or the payment was too small, the difference can be claimed as a credit on the return.
- Child Tax Credits (CTC) have been expanded, with more dependents now qualifying. Increased from 2,000 to $3,000 per child, or $3,600 for children under age 6. The age limit for qualifying children also increased from age 16 to age 17. Children with ITINs now qualify which may impact certain inbound assignees to the U.S.
- Plus, the CTC for 2021 is now a refundable credit and eligible for ‘advance’ payments, so taxpayers will receive the benefit even if they owe no income tax and can get 50% of the benefit ‘advanced’ over a six-month period beginning July and the remaining half claimed on the 2021 tax return. The IRS will be responsible for implementing a CTC advance payment system by July. Effectively, the CTC now is remarkably like many European family allowances/child benefits – a direct government cash payment based on family size. The CTC for 2021 is phased out over two tiers: larger credits targeted for lower incomes which are phased out first, and then the $2,000 credits for higher incomes which are subject to a second phase out. For married taxpayers, the second threshold begins at $400,000. The expanded CTC only applies to 2021. Democrats are hoping to make them permanent. CTC provisions are targeting to lift 45% of children out of poverty.
- CTC is not to be confused with the Child Care Tax Credit – for qualifying childcare expenses. This Child Care Tax Credit too has been expanded substantially for 2021.
- Enhanced federal unemployment benefits have also been extended to September 6that $300 per week. And a second change, for taxpayers with incomes below $150,000 the first $10,200 of unemployment benefits received in 2020 are non-taxable – this provision is retroactively effective only to the 2020 tax year and not for 2021. So, if you were unfortunate enough to qualify for unemployment benefits last year, you may want to consider amending your 2020 tax return if you already filed.
- Finally, the House again yesterday asked the IRS to extend the tax deadline for individuals beyond April 15th.