Employers can equalise tax burdens between different jurisdictions when an employee is sent to a foreign country. This results in the employee being guaranteed a fixed net take home pay, regardless of the tax rates in the host country.
A hypothetical tax burden is withheld from the employee's salary that is broadly equivalent to the tax that would have been suffered in the home country. Actual tax due in the host country is paid by the employer. If the host country tax is greater than the home country tax, the employer bears the excess, and vice versa.
When payable PIT is less in the host country, compared to the sending one, the withheld
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Web page updated on 17 Mar 2025 15:18