Mobility Strategy - Market Practices

Glossary of International Mobility Terms

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TERM DEFINITION Tax Equalization A methodology for calculating an assignee's tax burden wherein the assignee pays no more or no less in taxes than they would have paid in the home location. The company deducts a tax contribution from the assignee, and then pays all actual taxes to the host and home governments. If the tax burden is higher than a comparable home country assignment, the company typically reimburses the assignee for the excess taxes. On the other hand, if the total tax costs are lower than they would have been on a domestic assignment, the savings are generally passed on to the company – not the assignee. There is no windfall to the assignee if actual taxes are lower during the foreign assignment. This results in the assignee's spendable income remaining relatively consistent with that of the assignee's domestic/home country counterpart. Unaccompanied Status Assignees/employees who are single or their spouse/partner and eligible dependents are either not allowed or choose not to accompany them to the host country/new location.

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