1
Q
Objective of international compensation?
A
compensation must be
- consistent
- attain objectives
-structure
-strategies
-Attract
-Retain
-Motivate MNEs staff to stay in areas where they have the greatest opportunities
2
Q
Policies for compensation must be
A
- competitive
- recognize factors for incentive foreign services
- tax equalization
- reimbursement costs
3
Q
What does an individual expect within their compensation?
A
- financial stability (salary and benefits)
- issues related to living costs
- educational assistance
- housing and recreation
4
Q
Base Salary
A
- the amount that an employee is guaranteed to make (hourly wage)
- for expats this is the primary component of their package which includes the base salary
5
Q
Foreign service inducement
A
- expats are paid if they are in a country that has difficult living conditions
- also known as hardship premium
- depends on the nature of the assignment, the length of the assignment, the actual consequence of the assignment and tax consequences
6
Q
COLA
A
- cost of living allownces involves a payment to fulfill expenses between the home country and foreign country
- example: transportation, medical care, education, housing
- family size determines the cola and additional allowances are given to each child
7
Q
Maintaining home country standards
A
- home country living lifestyle is equal or similar to the foreign country
- amount of allowance depends on the family size
8
Q
Fixed housing allowance
A
- an alternative to provide a fixed allowance across a specific job level and preference according to the expatriate
9
Q
Home leave allowance
A
- employers will cover expenses for the expat when they decide to visit their home country
- opportunity to renew family and business ties
- minimize adjustment problems
- employees with limited international experience will feel more homesick than others who simply return home for a reality check
10
Q
Educational allowances
A
- cover expenses for tuition, textbooks, supplies and enrolment
- costs of local and international schools are covered by the employer
- Example: Germany and other Scandanavian universities will charge no costs for students despite their nationalities
11
Q
Relocation allowances
A
- helping move, ship, and provide service for storage systems
- Example: western countries will have U-haul trucks to make moves
12
Q
Spouse assistance allowances
A
- provide the spouse with employment opportunities such as job search assistance, cultural orientation, resume preparation
- MNEs generally pay to encourage employees to take on international assignments and retian employees
13
Q
Benefits
A
- pension plans are difficult based on different nations and their policies
- medical and dental dees can also be difficult to normalize
- provide vacation and special leaves to return to their home country
- rest and rehabilitation leaves
14
Q
MNEs need to address the following issues when considering benefits
A
- whether or not expatriates stay in the home country programs especially if the multinational does not receive tax deduction
- whether MNEs can enrol expats into the foreign programs and make up for the differences in coverage
- whether expats will receive home or host country security benefits
15
Q
Taxation issues
A
- time consuming to deal with for expats and the organization
- potentially complex for fly in fly out expats
16
Q
Two approaches to handling international taxation
A
- tax equalization
- tax protection
17
Q
Tax equalization
A
- firms withhold an amount equal to the home country tax obligation of the expatriate to pay in the host country
18
Q
Tax protection
A
- the employee pays the amount of tax they would pay in the home country
19
Q
Ad hoc approach
A
- the expat is handled differently based on the individuals package
20
Q
Laissez faire approach
A
- employees are on their own in conforming to the host country and home country tax laws and practices
21
Q
How is one considered an emigrant
A
- you leave Canada to live in another country
- you sever your residential ties with Canada
22
Q
Sever residential ties with Canada means
A
- you don’t keep your main ties with Canada due to
- dispose or gave up your home in Canada and established a home in another country
- spouse or common law partner leaves Canada
- dispose personal property and break social ties in Canada and must establish them in another country
23
Q
What makes you a factual resident
A
- if you leave Canada and keep your ties in Canada
24
Q
What makes you a deemed non-resident
A
- if you consider yourself to be a resident of another country with which Canada has a tax treaty
- subject to the same rules as an emigrant
Exam Prep
flashcards
Decks in class (7)
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