CGMP Migration Risk Assessment & Management 4

Question 1

A company is expanding operations to a country with which the US has no bilateral social security totalization agreement. What is the primary risk for US employees assigned there?

Accepted Answer

The employee may be required to pay social security taxes in both the US and the host country simultaneously

Answer

Without a totalization agreement, employees and employers may owe social security contributions to both countries on the same earnings, creating a double-taxation burden.

Question 2

A foreign national employee has accumulated more than 330 qualifying days outside the US during a tax year. Which IRS provision is relevant to their tax risk profile?

Accepted Answer

The Physical Presence Test for the Foreign Earned Income Exclusion under IRC §911

Answer

The Physical Presence Test under IRC §911 allows qualifying individuals to exclude a portion of foreign-earned income, but meeting the 330-day threshold is required.

Question 3

During a merger, an acquiring company discovers the target company employed hundreds of H-1B workers without maintaining public access files. Which due diligence risk does this represent?

Accepted Answer

Inherited DOL compliance liability and potential back-wage obligations that could accompany the acquisition

Answer

In an asset or stock acquisition, the acquiring company may assume compliance liabilities including DOL violations tied to H-1B public access file deficiencies of the target.

Question 4

A global mobility manager is assessing risks for a long-term assignment to Germany. Which factor most significantly determines whether the employee creates a permanent establishment (PE) risk for the company?

Accepted Answer

Whether the employee has authority to conclude contracts on behalf of the company in Germany

Answer

An employee who habitually exercises authority to conclude contracts on behalf of the company in the host country is a classic trigger for PE risk under most tax treaties.

Question 5

A CGMP professional is advising a company on shadow payroll for a long-term US assignee in France. What is the primary purpose of establishing a shadow payroll?

Accepted Answer

To ensure proper withholding and reporting of host-country social taxes while the employee remains on home-country payroll

Answer

Shadow payroll allows host-country tax and social security obligations to be calculated and remitted without moving the employee off their home-country payroll.

(CGMP) Certified Global Migration Professional Practice Test

(CGMP) Certified Global Migration Professional Practice Test

CGMP Migration Risk Assessment & Management 4