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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Tax Compliance

What does tax compliance refer to?

Tax compliance refers to the adherence to rules and regulations set by tax authorities. These include requirements for reporting, filing, and payment — all of which come with their own deadlines which, if not met, can lead to consequences such as financial penalties, interest charges, and legal action.

Tax compliance differs across countries. However, in most, to meet regulations, companies must report on their income and expenses and show what they have deducted from employees. Then they need to provide detailed documentation that’s in line with current tax laws and regulations.

Staying on top of tax compliance means staying up to date on changes in requirements and for that reason, it can be complicated for companies who are operating overseas. When hiring employees in another country, you have to understand local laws in each place, apply the relevant taxes to benefits, and report on the correct details in different formats.

You also have to consider whether double taxation applies. This is where an employee works in a different country to where the company is and taxes are required in both locations.

For accuracy and efficiency, it’s best to use a global HR solution for support with managing tax compliance. Multiplier, for example, automatically calculates tax and ensures compliant reporting in over 150 countries.

Ready to take the leap? Choose Multiplier as your EOR partner

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