Tax Liabilities for Short Term Foreign Assignments

Updated: Jun 3



A corporation sent five employees to Asia Pacific for several short-term assignments (3 to 9 months) over a 4-year span. The individuals were paid in the U.S., and although the corporation filed for a withholding waiver from the foreign government, the company never actually filed or paid the taxes on the individuals.


Six years later, the corporation received a notice for several hundred thousand USD in tax, penalty, and interest from the foreign government, requiring the individuals to obtain tax ID numbers in the country and file six years of back taxes. Only one of the individuals still worked for the company, so all the others had to be contacted and convinced to file the returns for the company to be allowed to continue operations in the foreign location.


PZI worked with the employees, to obtain the information needed to get the returns filed on time, implementing goodwill toward the former employees and mitigated potential employee lawsuits to the corporation.


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