Termination of Employment

When terminating employment relationships with an international component, several tax and practical considerations come into play simultaneously. This includes employees who have worked in multiple countries or have accrued international compensation components.

The tax treatment of a severance payment depends on where the work was performed and how the employment relationship was structured. This requires careful coordination within the tax and global mobility teams, especially when multiple countries are involved.

Without a proper assessment, ambiguities may arise regarding taxation, payroll, and tax returns, with potential consequences for both the employer and the employee.

Frequently Asked Questions

• How is a severance payment taxed?

• How do we distribute this across multiple countries?

• What does this mean for payroll and tax returns?

• How do we handle international work history?

• What obligations apply to employers and employees?

What Nassau Can Do

We assist organizations and employees in international termination situations and ensure a proper and practical resolution within the areas of tax and global mobility.

Our support includes, among other things:

• Analysis of the tax treatment of severance payments

• distribution of income across the countries involved

• alignment with payroll and reporting requirements

• guidance on practical implementation and documentation

• support with communication and coordination with relevant parties