The Migrantic partners write a weekly tax and/or immigration law column in a local newspaper. These columns are also featured below.

The accidental expat

In our increasingly interconnected world, companies are questioning whether they need to relocate their individual employees particularly when relocation is so expensive. Instead of sending them abroad for years at a time, together with all their family members, why not send them to a particular location when needed? In this way companies avoid additional taxes, housing is not required and the cost of living and other expenses are reduced. The accidental expat is born.

Employers do not realise that the accidental expat poses a compliance threat. In order to avoid the expenses and the cumbersome bureaucratic processes of work authorisation procedures, accidental expats travel frequently in and out of the country as a tourist or business visitor whilst the nature of their working activities require work authorisation. By booking their own travel (or having their assistants making the required reservations), overstays are overseen, work authorisation is not requested resulting in an entry denial and detention at customs.

During my many years working as an immigration lawyer, I frequently notice that the short-term nature of the accidental expat has the tendency to turn into a longer assignment, as local (or international) management require them to stay on for another few months. Not only does this create foreign income tax and social withholding requirements, their initial stay as a business visitor was basically on improper grounds exposing them (and their employers) to high compliance risks.

Unfortunately, employees being denied entrance or being penalized for tax violations are occurring on a frequent basis. For this reason, the Dutch Labour Authority is increasingly visiting and checking companies whether they have the proper work authorisation in place. Companies may receive penalties, the accidental expat can be deported, all resulting in quite a reputation damage.

The accidental expat is thus warned. Before going on a business trip or on an international assignment, please check the immigration and visa requirements, tax and social security implications. It can make life much easier!

 

Immigration specialist