The time and financial constraints associated with rotational or long-term assignments are pressuring many companies to solve their need for global talent mobility with short-term business travel. However, travel of any kind, particularly business travel, can be risky… especially with the ever-changing environment we find ourselves in.

In the event of a global or domestic relocation, it is extremely important that business travel be assessed by global mobility professionals who are up-to-date on current risks. Without efficient care and management, individual employees may face complications in the following areas.

Immigration

Every country has its own visa requirements and restrictions. These specify how long business travelers may stay, and what types of activities they may engage in, when traveling on specific visa types.

For example, a company may issue a business visitor visa that permits stays of up to 30 days for conferences, meetings and training. In general, a breach of these restrictions consists of extending a visit without renewing a visa, engaging in business activities that could be construed as gainful employment, or providing services that directly benefit a client company. Unfortunately, managers and employees aren’t always informed about visa restrictions. This can result in ad hoc extensions of short-term visits or business travelers unwittingly participating in business activities that are prohibited.

It’s important to understand the precise conditions for each visa and each country. Especially since an increasing number of countries are tightening border controls, keeping accurate records is key to avoiding penalties for both individuals and employers.

Tax Compliance

Business travel can have significant consequences for tax compliance. The duration of an employee’s visit, the types of professional activities in which he or she engages, and factors pertaining to remuneration need to be assessed to determine whether there’s a reporting requirement in the host country. If so, does this reporting requirement pertain to the employee, the employer or both?

Additionally, employers must be aware of tax implications. What creates a Permanent Establishment (PE) in a host country? Tests for determining whether a PE exists will vary by country, though generally the type of work performed and the length of time operating within the host country are taken into account. It’s important to research the host country’s Permanent Establishment laws to ensure compliance and therefore minimize tax liability risk.

The international tax regulation and compliance landscape is complex. Moreover, considering current political changes in the U.S. and Europe, tax regulation and compliance are likely to keep developing for the foreseeable future. Employers need to ensure they’re always up to date on taxation thresholds and international treaties so they can take action to comply with reporting requirements for their employees and the corporation.

Compensation

Many managers assume that sending employees overseas has no impact on those workers’ salaries. However, this can be a potential pitfall for both the company and its workforce. Depending on a business traveler’s visa and the length of stay, payroll can very well be affected. Employers might have to assume the payroll obligations of the host country; for example by meeting local taxation and social security obligations.

Navigating payroll for business travelers can become an incredibly complicated matter for HR departments to manage.

Privacy

Most companies establish some form of tracking for business travelers. This is intended to provide legal, HR, payroll and accounting departments with the information necessary to meet immigration, tax reporting and payroll requirements. Tracking data about flights, hotel bookings, rental cars and business expenses charged to a corporate credit card is generally considered to be a normal business practice that doesn’t affect a business traveler’s privacy.

However, other tracking methods–such as GPS tracking data and/or collecting data from employee-owned devices–can be construed as an infringement on an employee’s right to privacy. This is particularly important in areas like Europe, where individuals enjoy more privacy protection than in the U.S. (though American companies may also need to track data depending on corporate privacy policies and ever-changing domestic legislation).

Safety

Safety for the business traveler has also become a major concern, as we see rising terror threats, natural disasters, diseases and armed conflicts. It’s essential for employers to ensure their mobile populations’ safety and well-being. The employer must know where every traveling employee is at all times, and be able to reach them.

Base Erosion and Profit Sharing

Base Erosion and Profit Sharing (BEPS) is a tax planning strategy used by multinational companies where they report or shift profits or income to low-tax or no-tax locations to avoid paying taxes elsewhere. Currently, there is a focus on tax rules and regulations to ensure that profits are taxed where economic activities generating the profits are performed. This has translated into a need for employers to not only track business travelers from a safety perspective, but also from a “purpose perspective.”

For example, if an employee traveled to a different country for training, when no profit was generated, there would be no tax liability; however a sales employee traveling to finalize the signing of a new contract may result in the company being required to pay tax on the contract in the country of signing.

It is extremely important to keep these risks in mind when thinking about any relocation assignment. Without compliance and efficiency, assignees, and even your business, can risk long-standing consequences. Have questions about how you can use compliance to assess and address risk? Read our article here about compliance in the virtual world.

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