16 experts advise on what’s to come this year.
Concur and EY have teamed up to give travelers a real-time
assessment of their potential tax and immigration law liability each time they
book a trip through Concur's online travel tool. According to EY People
Advisory Services partner Nick Bacon, travelers book in the normal way but also
select the purpose of their trip from a drop-down menu. “The information is
logged with Concur and shared with EY [via an application programming
interface] and we will throw back an instant analysis,” said Bacon.
If EY’s platform—called Travel Risk and Compliance, or TRAC—identifies a requirement for a work permit or business visa, EY can initiate
and facilitate the relevant application process. Similarly, if the visit
triggers a tax liability for the traveler or their employer, EY can tee up
relevant compliance procedures, such as payroll withholding tax.
Tax compliance for business travelers is becoming an increasingly
fraught challenge for multinational corporations. A foreign business trip of as
little as one day can oblige an employer to register a traveling employee for
tax. Bacon said that while most countries’ rules have changed little in recent
years, tax authorities have started enforcing those rules far more assiduously.
“Traditionally, tax authorities have focused on expatriates,” he
said. “In more recent years they have begun to focus on people who maybe travel
on business for just a few days and can represent areas of tax compliance
failure. We do see in many countries business travelers as one of the key items
on an audit checklist. Tax authorities will be looking for evidence that
travelers coming into their country are being properly tracked and reported.
“It’s way more than a theoretical risk. There are some big war
stories out there. We have clients who have paid tens of millions of dollars in
penalties, fines and unpaid taxes in jurisdictions like New York, the UK and
Germany.” Other countries increasingly cracking down, according to Bacon, are
Australia and Canada, “and there’s a growing awareness in China and India.”
Tax rules affect many business travelers entering the U.S. For
visitors from Hong Kong, Singapore, the United Arab Emirates and Brazil, “from
day one the company will need to report your presence and apply for a U.S. tax
identification number and apply payroll reporting,” Bacon said.
Traditionally, tax authorities have focused on expatriates,” he said. “In more recent years they have begun to focus on people who maybe travel on business for just a few days and can represent areas of tax compliance failure."
Breaches of tax and immigration laws can also cause companies to
fail in their duty of care towards employees, another EY partner, Tracy Wood,
told a Concur customer conference in London last week. Wood said there have
been cases of people being “stopped on holiday for not having complied with tax
law and of not being allowed to enter the U.S. through the usual ESTA
[Electronic System for Travel Authorization] arrangement.”
Given this complex regulatory web (which can include local professional
registration for occupations such as financial traders), the need for
businesses to track where employees are visiting, for how long and why, is
obvious. Solutions have ranged from the rudimentary, such as monitoring office
visitor books, to using online tools such as Voyage Manager, originally created
for security tracking purposes but which was expanded to cover tax and immigration
tracking after a request from client Xerox.
EY and Concur claim their partnership is the first to offer
real-time immigration and tax assessments to business travelers. However, the
assessments offered by EY are useless without it having full visibility of all
foreign visits by employees, regardless of the booking channel, and probably no
company has 100 percent of its employees’ trips booked through Concur.
The alternative for non-Concur users, said Bacon, is to access TRAC directly
to enter their itinerary and purpose of trip. “The disadvantage [of not
entering the details through Concur] is that the traveler is adding [another]
step to the process,” said Bacon. His recommendation is to emulate a major EY banking
client by configuring TRAC to generate a unique ID which the traveler must
quote to obtain expense reimbursement. “That gets everyone’s attention,” said
Bacon. “We have 99.99 percent adherence.”
Another solution would be for EY to partner with more travel service
providers so that travelers only have to perform one-time data entry. However,
Bacon said EY has no partnerships with any TMCs for offline bookings and no
plans to create any. As far as other booking tool providers are concerned,
Bacon said the partnership with EY is “exclusive”, although he declined to elaborate
on the extent to which that exclusivity prevents EY from collaborating with
competitors to Concur.
Bacon said EY and Concur are already working jointly on two client
implementations. Time taken for an implementation, he said, is “typically three
months but it can be a lot longer.”
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