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Taxation systems and international remuneration schemes

More than ever, employee relocations are a major issue for decision makers (President, C.E.O., General Manager, Business Unit Director) and their supports, (HR, financial and legal departments, consultants).

On the other hand, international executives do not have a universal status. Each situation is original and the defined balances are unstable, requiring follow-up and real time adjustments in order to make a foreign assignment attractive for the executives and control company costs.

In response, the company owes it to itself to adjust employees transfers according to its own needs. This requires a thorough knowledge of the economies, laws and taxation systems of the countries where the company operates, and where they wish to send their executives.

For each client, multi-national corporation, specialized company, institution, individual client and reference framework, Intelfi defines relocations abroad through an essential variable: taxation on compensation and benefits.

Consistency : optimizing international salaries based on a country's tax code is implemented by salary committees. This is done in order to comply with all of government regulations for companies, establish a fair ratio between compensation and value, determine market practices and the reference levels in each country.

Tax incentives : The company and international executive must each perceive that there is an objective financial advantage beyond gross monetary values. This reality is found in an optimal utilization of taxation systems and the real value of net earnings.

Permanence : the balances defined at the time duties are taken up have a very short lifespan. Due to amendments to national taxation codes and their intricacy, a result of the executive's financial and/or personal situation, tax optimization is only valuable if it is long-lasting. Intelfi watches over the situation and provides updates and real time adjustments

To be successful in providing optimized, equitable and cost-effective tax incentives, Intelfi principally handles the following:

▪ Determines domicile for tax purposes

▪ Researches the conditions for avoiding double taxation

▪ Applies the principle of leveling out the tax burden and its consequences

▪ Defines the benefits structure and remuneration

▪ Calculates the specific compensation package for the transfer

▪ Determines which tax solutions are most adapted to constant multi-country assignment

▪ Communicates the specific solutions to members of executive committees and management

Intelfi applies its services to all components of financial compensation or benefits, immediate or deferred, with the only priorities being that of tax efficiency, cost control, and adaptation to the company's policies.

90% of the findings regarding the taxation system is provided when signing the abroad employment contract. This makes it possible to guarantee the quality of the solutions but not their permanence in an international tax environment that is unstable and influenced by many factors. The clauses provide for annual adjustments resulting from substantial changes and at the time of annual performance reviews. These indexed or retro-active adjustments are most often expressed in gross figures without posting net developments of revenues and costs.

Intelfi's international expertise, its mastery of quantitative modeling techniques applied to tax systems, and continuous optimization, make it possible to allocate company costs in the most advantageous manner possible and to establish an additional level of trust as a result of the flow of information between the company and its international executives.
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Conception et creation: Julien Preszburger