Tax Equalisation

An arrangement where the employer provides support to an employee and has agreed to help fund some of the taxes incurred by an employee during an overseas assignment.


Tax Equalisation

To ensure employees are neither ‘better off’ or ‘worse off’ when going on an international secondment, an employer may implement a Tax Equalisation (“taxEQ”) policy or arrangement. This typically involves an agreement by which the employee is entitled to specified net cash earnings and non-cash benefits. The idea is to ensure that the employee has approximately the same net or ‘take home’ income which they had in their home country before the assignment. The employer therefore takes responsibility for assignment-related tax to keep the employee in a cost neutral position and also provide a professional adviser or in-house specialist to help with the individual’s assignment-related tax affairs and administer the taxEQ policy.

How can we help?

We have extensive experience in helping organisations in drafting, implementing and managing their tax equalisation policies and we can help you and your employees in the following ways:
  • We can help you in deciding the best approach to take according to your business and commercial needs.
  • We can draft your tax equalisation policy or agreement.
  • Provide employee briefings to explain how the policy works and answer employee questions.
  • We can help you in implementing and managing the policy.
  • We can help you in preparing calculations related to the policy including hypothetical tax calculations, tax equalisation reconciliation calculation etc.
  • If you already have a policy or agreement in place, we can do a health check to make sure it is effective and suited to your business and commercial needs.
  • Advise in disputes/provide Expert Witness support.

We were awarded the best International and Expatriate Tax Team at the 2015 Taxation Awards. Recognised as a mark of excellence within the sector, the awards were judged by a panel of leading professionals and officers of major tax institutions.