This PPT was session 7 at the INSZoom Immigration Conference 2015 in Bengaluru. The session was presented by Stephen Rao of Sapient Corporation.

1. INSZOOM Immigration Conference 2015
Empower Employees for Immigration Compliance

2. • Stephen Rao currently works for Sapient in
Gurgaon, India. He is a Director – Regional
Mobility Team (India & APAC).
About the Author: Stephen Rao

3. {
International Tax
&
Compensation

4. Recap
Technology US Visa
Current
Updates
International
Compensation
and Tax

5. Introduction to International
Compensation & Tax

6. Assignment Types
Host Country Payroll
•The assignee’s payroll becomes inactive in the home
country and becomes active in the host country.
Home country payroll
•The assignee remains on the home country payroll.
Host country entity may create a shadow payroll for
tax and social security filing obligations
Split pay Model
•The assignee get a part of the payroll in home country
and gets assignment allowances in the host country

7. Residency
Taxable
Income
Domestic
Tax Laws
Income
Tax
Treaties
Basics for understanding Income tax

8. Panel Discussion
Exposure due to Business Travelers and Short Term
Assignments – Sruthi Ananthachari
Black Money (Undisclosed Foreign Income and Assets)
and Imposition of Tax Act, 2015 – Amarpal Singh
Social Security Tax – Exposure to corporate entities –
Ravi Jain
Income tax processing and FBAR – Karthikeyan
Gangadharan

9. Exposure due to Business
Travelers and Short Term
Assignments
Sruthi Ananthachari

10. Black Money (Undisclosed
Foreign Income and Assets) and
Imposition of Tax Act, 2015
Amarpal Singh

11. Social Security Tax
Ravi Jain

12. Income tax processing and
Foreign Bank and Financial
Records
Karthikeyan Gangadharan

13. Questions?
Slido.com ( #IIC2015)

14. Background Slides

15. Resident
For the purposes of this Convention, the term
"resident of a Contracting State" means any person
who, under the laws of that State, is liable to tax
therein by reason of his domicile, residence, place
of management, place of incorporation, or any
other criterion of a similar nature, and also
includes that State and any political subdivision
thereof.

16. Resident in 2 Countries
Treaty tie breaker article
Simplified extract of Treaty Tie Breaker Article
Where by reason of the provisions of paragraph 1 of this Article, an individual is
a resident of both countries, then his status shall be determined as follows:
•he shall be deemed to be a resident in the country in which he has a permanent home available to
him; if he has a permanent home available to him in both countries, he shall be deemed to be a
resident only of the country with which his personal and economic relations are closer (centre of
vital interests);
•if the country in which he has his centre of vital interests cannot be determined, or if he does not
have a permanent home available to him in either country, he shall be deemed to be a resident only
of the country in which he has an habitual abode;
•if he has an habitual abode in both countries or in neither of them, he shall be deemed to be a
resident only of the country of which he is a national;
•if he is a national of both countries or of neither of them, the competent authorities of the both
countries shall settle the question by mutual agreement.

17. Tax Residency and Taxability
• Generally taxable on the worldwide income
Tax Residents
• Generally taxable on income from specific source
Tax Non-Residents
• Employment Income
• Personal Income (eg. Interest, Dividend, capital Gain)
• Deferred Income (eg. Pension, Gratuity, Equity, e
Tax Residency status impacts the taxation of an expatriate

18. Compensation wage elements
Stay At Home Compensation may include:
•Basic Salary/Wages
•Special Allowances
•Bonus
•Deferred compensation
•Stock options/Share awards
•Group term life insurance
•Education Allowance
Assignment Compensation :
•Cost of living allowance
•Housing
•Family allowance
•Tax reimbursements
•Tax preparation fees
•Hypothetical tax
•Home leave / Flyback
•Foreign service premium
•Foreign taxes
•Relocation allowance

19. •Time Basis: compensation other than fringe benefits
•Geographical Basis: certain listed fringe benefits
•Alternative Basis: facts and circumstances
Sourcing of income
Time Basis
Base salary
Vacation pay
Incentive awards
Stock option
income (special
rules)
Flexible
compensation
Reimbursed club
dues for a U.S.
club membership
Geographical
Basis
Housing:
Education:
Local
transportation:
Foreign Tax
reimbursements:
US Tax
reimbursements:
Hardship duty
pay:
Moving
expenses:
Cost of Living
Allowance
Alternative Basis
Where income
may be taxed on
receipt basis- India
Deemed
disposition of
Capital Asset

20. Dependent Personal Services Article
Generally, personal services income is treaty exempt if the
employee is in the host country :
for 183 days or
less, and
Is not paid by an
establishment in
the host country,
and
The
compensation is
not borne by a
Permanent
Establishment in
the host country

21. • John Stephen Rao
Sapient Corporation
Sector 21
Gurgaon, Haryana 122016, INDIA
+91 124 4167271 T
+91 97111 89970 M
srao21@sapient.com
• INSZoom.com, Inc.
2603 Camino Ramon, Suite 375
San Ramon, California 94583 USA
925 244 0600 T
Sales@inszoom.com
Contact Info: