Put the focus on the human factor with Henk International.
We would like to encourage companies to consider the human factor of a move abroad, as well as the organisational, taxation and insurance aspects. In our experience, it is important to give the assignee a generous amount of time off in order to look after bureaucratic procedures, take language courses and attend medical appointments. A look-and-see-trip is another way to help prepare all the people involved and take away any fears of the unknown.
"It’s never been just about moving.“: our many years of experience with moves abroad have shown that, especially with long-term assignments, it is important to consider the social components of a move, and not just view it as a movement of belongings from A to B.
The more comfortable the experience for the assignee and the family, the more motivated that person will be for the new task at destination.
In over 50 years, Henk International has specialised in meeting the demands connected with foreign assignments. We offer a comprehensive, tailor-made move management concept that includes services connected with relocation, group moves and repatriation - all from one source.
Amendment of the employment contract if the stay abroad exceeds one month
Working stays abroad of up to one month are classified as business trips, and for these there is no need to change the work contract. If the stay abroad is longer than one month, then the employment contract needs to be amended. The contract should define the length of the stay abroad, the conditions for the return and the time after that, notice periods, place of work, salary and the currency in which the salary is paid.
In addition, it can be a good idea to define vacation time and public holidays, payment of expenses and the need for additional insurance cover.
Taxation and insurance
If the assignee keeps his residence in Germany, then he needs to continue making his tax return here. To avoid double taxation, the German government has made special agreements with many countries.
If the stay abroad is less than 183 days, and if the salary is paid by the company in Germany, then all tax issues take place in Germany.
For long-term assignments, income generated abroad is taxed abroad. The tax payments are taken into account in Germany. If the assignment is for a fixed period of time, and the assignee is expected to return to the company in Germany, then social security arrangements in Germany continue. This also applies to expats who work for subsidiaries abroad and continue to receive a salary from the company in Germany.
Assignments within the EU should not initially exceed 12 months. Should an extension of the stay abroad be necessary, an application must be made to the social security authorities of the host country before the 12-month period is over. Should the application be approved, the German social insurance still applies. Employees who are regularly deployed in several EU countries have to make social insurance contributions in those countries where they earn at least 25% of their income. To help expats to avoid any problems, it can make sense to make voluntary social insurance contributions.
Germany has agreements with many non-EU countries to regulate social insurance contributions. Each individual case needs to be checked to see which insurance benefits (social, health and accident insurance) are avaiable to which conditions. For assignments to countries for which no special agreement exists (like Russia and Saudi Arabia), the German regulations apply.
Things to consider when the expat returns
The long-term assignment can end when the agreed assignment period comes to an end, or when the employer recalls the expat, or the expat resigns. In every case, it is important to decide in advance the entitlements and obligations of both parties. When the expat returns to the origin country, the conditions of this return need to be agreed, for example, if the old work contract still applies, or if a new contract is needed. Does the person return to the old position or take up a new job?
Next to legal and contractual aspects, the human factor should also be considered. Companies that want the best for and from their employees provide the framework for a smooth repatriation.
Do you have any questions? Contact us for advice from our international assignment experts.
Send us an email or call us on +49 211 99 80 70.
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