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Compliance Risk Management Crucial for Companies Operating in Slovakia

Companies operating in Slovakia must navigate a complex web of national and regional tax regulations to minimize compliance risks and ensure effective global mobility strategies.

Challenges Faced by Multinational Companies

Multinational companies face numerous challenges, including:

Navigating intricate tax regulations
Controlling risk across a vast global backdrop
Coordinating assignees’ taxes
Finding the right technology to manage it all

To achieve these goals, companies must examine their expatriate tax programs and assess whether they are meeting individual tax and social security compliance requirements, minimizing tax authority reviews and challenges, and managing both individual and corporate tax risks.

PwC’s International Assignment Services (IAS)

PwC’s IAS practice helps companies address:

Home and host country tax filing requirements
Permanent establishment risks created by international assignees
Global compensation reporting and payroll withholding
Individual tax compliance risk management
Non-resident tax filing requirements
Cost estimation and management
Accounting for assignment costs and taxes
Equity tax planning and trailing liability management
Creating tax-efficient employment structures
Using technology to support accurate and timely compensation for employees working abroad

PwC’s Global Tax Network

PwC’s global tax network and professionals from PwC Slovakia have the knowledge and practical experience to help companies address their most complex tax positions and tax authority controversies. The firm has extensive experience resolving issues related to:

Short-term assignees
Frequent business travelers
Tax treaty matters
Transfer pricing for cross-border labor
Expatriation
Foreign tax credits
Treaty issues
Foreign-earned income and travel expenses

Permanent Establishment (PE) Risks

The international relocation of employees on short and long-term assignments may create permanent establishment (PE) risks in the foreign country for the enterprise. Companies must understand the structure and nature of temporary international work assignments to gauge the level of enterprise tax risk by jurisdiction. Working with HR departments and monitoring this risk for global mobility programs is a fundamental part of corporate tax department’s risk management activities.

Immigration Issues

In addition, companies must consider immigration issues when moving employees across borders. A strategic approach to immigration requires having a finger on the pulse of pending immigration changes across multiple countries and regions. PwC provides effective, integrated immigration and tax advice to streamline processes and reduce costs.

Growing businesses often require moving employees between countries, which means fulfilling local social security obligations. In an environment where regulations change continuously and scrutiny from authorities is on the rise, it’s becoming harder to get it right. PwC’s social security experts in Slovakia maintain close links with government authorities to keep companies up-to-date on social security developments and help reduce risks.

Holistic Tax Planning

PwC approaches tax planning with a holistic perspective, considering:

Corporate tax
Payroll
Accounting
Risk management
Administrative effort

The firm identifies opportunities to add value from the first day of working with clients, including reviewing tax filing positions, equalization policies, payroll reporting and withholding practices, handling of equity-based compensation, and inter-company charges relating to expatriate compensation.

Reducing Costs and Managing Risks

By considering corporate reputation and global compliance, PwC’s tax planning recommendations aim to reduce costs and manage risks while maintaining a company’s global footprint in Slovakia.