International Payroll Management

Our payroll services for international postings include determining the tax-exempted periods at home and abroad as well as the allocation/breakdown of salaries according to the double taxation agreements / decree on employment abroad in accordance with the requirements defined by the Federal Ministry of Finance (BMF). The tax-exempt wage according to the double taxation agreements / decree on employment abroad forms the basis for the subsequent calculation of hypothetical taxes (HYPOTAX).

Following settlement, the issue of wage certificates for taxation abroad (foreign wage certificates) is an integral part of our services. Our experts prepare the subsequent synchronisation of the domestic and foreign payroll accounting either in cooperation with our client's own tax advisor or the global partners of WTS-Global.

We accompany these processes both on a monthly basis and as part of the year-end corrections imposed on employers at the end of each calendar year.

Tax-exempt wages under the double taxation agreement or decree on employment abroad must be declared in the employee's personal income tax return in Annex N-AUS. However, the information required for this annex is either unavailable to the employee or is not available in sufficient detail. The employer is therefore obligated to cooperate as part of its duty of care to the employee.

The automatic generation of this annex directly from salary data is one of the services we provide as part of our International Payroll Advisory / Global Payroll Management.

Our team of experts assists with the implementation and completion of shadow payrolls in all inbound cases with an economic employer in Germany. This includes calculating the wages to be taxed in Germany, determining the employee's personal tax liability, including requesting all necessary forms (e.g. tax class certificates for wage tax deduction), as well as setting up the correct wage types in your payroll accounting system.

At WTS, we are also there to help our clients should something not go smoothly. We prepare the declarations listed in para. 41c (4) EStG (Income Tax Act) with respect to uncompleted or incorrectly submitted wage tax deductions and provide assistance during and after a tax audit.

If desired, we will complete compensation and disadvantage calculations on the basis of a assessment result. Examples of this are:

• Progression compensation
• Tax equalisation or tax protection calculations
• Allocation of tax liabilities in net wage agreements

As part of our payroll accounting services for international employee postings, we also assist with documenting the above calculations for employees to be used at home and abroad, as well as for any wage tax audits.

We also provide advisory services on all mobility topics relating to payroll accounting, such as payroll processes and the special features of your accounting system for international matters. If desired, certified SAP© or Datev experts are available to assist you.

In addition to the above, our services include the digitisation and automation of our clients' accounting processes. Amongst other things, these services include:

• Technical conception of global mobility IT solutions
• Advice on IT processes between HR, payroll and abroad / tax advisors
• Support in IT or payroll projects for employee postings
• Availability of various SAP© add-ons for situations specific to an assignment
• Off-line interfaces for all standard accounting systems for providing WTS services

In selected countries, our portfolio includes comprehensive services relating to foreign (shadow) payroll accounting, including the required statutory registration requirements.

Our services include the organisation of secondment meetings with expatriates to explain the tax and social insurance consequences of their postings, both in their home and host countries. We also assist the employees of our clients when applying for tax and/or social security numbers abroad.

For our clients as employers, we ensure compliance to foreign income tax law: when it comes to the taxation and social insurance contributions of employees posted abroad, we calculate the sum of taxable income abroad (possibly proportionate) according to national law. This is done on the basis of the salary data and posting periods provided by the employer.

We carry out the foreign (shadow) payroll accounting on the basis of these values and transfer the wage tax and social insurance contribution data to the foreign authorities.

The preparation and transmission of annual reports as well as applications for income tax prepayments and the preparation of foreign income tax returns are also integral aspects of our services. We also advise employers on the fiscal optimisation of salary components in accordance with the respective national tax legislation.

Our activities abroad are currently focused on the handling of shadow payroll accounting and income tax for employees posted in Finland and Norway. If necessary, we can gladly assist with other countries.