What is the aim of tax equalization as a part of compensation?
A) Provide extra money in case of tax discrepancies
B) Lower the tax obligation of the organization
C) Provide that expatriates neither gain nor lose as a result of taxation
D) A bonus to incentivize expatriates.

Question

Quizplus · Accepted Answer

Tax equalization aims to ensure that expatriates neither gain nor lose as a result of taxation. It achieves this by equalizing the tax burden of the expatriate's home country and host country, such that their overall tax liability remains the same as if they had not been sent on an international assignment. This provides a fair and equitable compensation package, which helps to attract and retain top talent for global mobility roles. A and B are incorrect because tax equalization does not provide extra money or lower the tax obligation of the organization. D is incorrect because tax equalization is not a bonus but rather a standard component of a comprehensive expatriate compensation package.

What Is the Aim of Tax Equalization as a Part