DOCSLIB.ORG

A Global Guide to Business Relocation 2015 Contents

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
A Global Guide to Business Relocation 2015 Contents A global guide to business relocation 2015 Contents 01 Introduction 67 Key country profiles 113 Isle of Man 02 Relocation options – EMEA 114 Italy 10 Key country summary 68 Belgium 115 Japan 71 Cyprus 116 Kenya 12 Key country profiles 74 Hungary 117 Korea – Americas 77 Ireland 118 Latvia 13 Argentina 80 Luxembourg 119 Lithuania 17 Brazil 83 Malta 120 Malaysia 21 Canada 86 Netherlands 121 Namibia 24 Chile 89 Spain 122 Peru 27 Colombia 92 Switzerland 123 Poland 30 Mexico 96 United Arab Emirates 124 Portugal 33 Panama 99 United Kingdom 125 Qatar 36 Puerto Rico 126 Russia 40 United States 102 Other territory profiles 127 Slovak Republic 103 Algeria 128 South Africa 43 Key country profiles 104 Austria 129 Sweden – Asia Pacific 105 Botswana 130 Taiwan 44 Australia 106 Czech Republic 131 Turkey 48 China 107 Denmark 132 Uganda 52 Hong Kong 108 Estonia 133 Vietnam 56 India 109 Finland 134 Zimbabwe 60 New Zealand 110 France 63 Singapore 111 Germany 135 Contacts 112 Greece This information has been provided by Grant Thornton member firms within Grant Thornton International Ltd and is for informational purposes only. Grant Thornton International Ltd cannot guarantee the accuracy, timeliness or completeness of the data contained herein. As such, you should not act on the information without first seeking professional tax advice from one of the contacts at the rear of the publication. Introduction Many companies from large multinationals to entrepreneurial businesses are choosing to relocate part or all of their operations to new territories. There are a number of cost and commercial reasons why a group may consider relocating, but it is also important to understand the consequences. The key to successful business relocation is early planning, clear commercial objectives and careful execution. Our relocation guide provides pragmatic advice for executives, including outlining the drivers of relocation, the types of activity commonly relocated and the commercial, cost and tax factors of popular relocation destinations. Grant Thornton member firms around the world have significant experience in advising clients on how their businesses can benefit from relocation. The highest profile cases involve full corporate migrations or inversions – the head office and holding company structure transferring to a new jurisdiction. However the options are numerous and the right answer may be much simpler, from setting up a regional hub to offshoring support services. We hope you will find this guide useful in assessing whether business relocation is right for you. If you would like to discuss the next steps please contact your own Grant Thornton adviser or one of the Grant Thornton contacts listed. A global guide to business relocation 1 Relocation options Governments continue to use investment incentives and simplified compliance arrangements to attract successful, entrepreneurial businesses. However, the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) initiative which seeks to ensure the tax system keeps pace with the shift towards an increasingly borderless digital economy, is likely to impact on worldwide tax rules. While still under development it could eventually lead to significant tax change affecting relocation. Grant Thornton is playing an active role in the discussions and consultations on this issue making us well placed to help you navigate the considerable current complexity and mitigate risk. What is business relocation? Whilst most people instantly think of full corporate migrations for business relocations, there are a number of much simpler options which can also achieve excellent efficiencies and cost savings. Determining the right structure and location for a business requires assessing numerous competing factors and will be individual to each group, but some common examples are: Full migration This type of relocation has been highlighted by some high profile migrations and can be either a relocation of headquarters or holding company or both. A migration of the holding company typically involves an inversion, whereby a new holding company is set up above the existing group holding structure. However, it can sometimes be achieved by migrating the management and control of a holding company to a different jurisdiction. Whilst the benefits can be significant, for example, moving to a country with a simpler tax and legal framework, there can be issues in terms of exit costs and there needs to be a strong appetite for change to make this relocation work. It is also important to consider any reputational challenges. Use of Intellectual property (IP) Increasing use is being made of IP holding regimes by many international groups. Such companies are responsible for holding companies and regional hubs the ongoing development, protection and exploitation of IP or development of regional business. Given the need for IP protection and the significant income it can generate, groups are considering the best place to locate these assets to maximise protection and manage tax in the most efficient way. As the OECD BEPS initiative continues to develop through 2015 the impact on the way cross-border activities take place will inevitably change as governments look to counter what they see as harmful tax practices more effectively. Offshoring There can be significant cost savings through offshoring. In its simplest form offshoring could be the relocation of a support function overseas. Increasingly, this has been extended to more value-add functions including research and development (R&D) centres and treasury companies. For the former, such centres may be located where there is a wealth of technical staff, efficient tax arrangements and incentives to encourage investment. Changing the risk model Where it is not appropriate to physically relocate certain functions, then an alternative may be to operate through a commissionaire, franchising or licence model. Under such an arrangement, the risks borne by the local distribution or manufacturing entity may be substantially reduced. This in turn can limit the profits attributable to these entities, with increased profits being generated by the entrepreneur company. This involves limited physical disruption to the business. It is worth noting that commissionaire arrangements have been a concern of tax authorities for a number of years and they have now become one of the higher profile issues within the OECD BEPS initiative. 2 A global guide to business relocation Relocation options What drives business relocation? There are significant potential benefits to relocating abroad – access to markets, simplified compliance and cost savings are cited as key reasons. The popularity of business relocations is driven by a series of global economic factors: • globalisation: the disparity in growth rates between • competitive advantage: as more corporate groups take emerging markets and mature economies is accelerating the advantage of the opportunities arising from relocation, it pace of globalisation, as companies seek to access capital, is important to maximise value by reducing costs, thereby goods or markets in different regions of the world. There keeping a competitive advantage is also a growing pool of internationally mobile employees • tax incentives: many governments are adjusting their tax willing to relocate for these opportunities regimes to help encourage companies to relocate and create • slow economic recovery: pressure on businesses to reduce jobs within their markets. Particular areas of focus include costs continues as they continue to respond to the last IP management and other high-value functions. Where global recession. There can be significant operational and commercial activities are located in these jurisdictions, administrative benefits arising from centralising functions overall effective tax rates might benefit from such incentives and relocating them offshore to an appropriate location, • other: a number of other factors can also be considered while tax cost might also be lower when relocating including, local business environment; • increased compliance burdens: other regimes, particularly government incentives; personal and corporate liability; in the G20 economies, are introducing complex compliance culture; governance; language; political reasons, social systems to control behaviour and discourage loss of tax stability and ease of inward investment amongst others. revenue across borders. This is creating a huge compliance burden for groups and arguably is accelerating the migration of businesses away from those jurisdictions A global guide to business relocation 3 Relocation options What activities can be relocated? A group’s typical supply chain has three key aspects and examples of functions and ways to relocate these are set out below: Functions Examples Ways to relocate Back office • Offshoring Support Customer support support • Treasury companies • Centralisation Research & Manufacturing Business • Changes to risk model development & sales • Research centres of excellence Executive • IP holding companies Value-add IP management decision making • Migration of holding company Support functions Offshoring: Relocation of routine functions such as support services is common and is often relatively straightforward. Typically the moves are driven by operational savings and low costs. An example of this is Malta, a popular offshoring location. Treasury companies: Treasury companies have widely been used in group structures to manage
Load more

Recommended publications
  • Oc Undeliverable Refunds Final.Pdf
    Sample article for organizations to use to reach customers (288 word count) Customize and post the following article on your websites and/or other communication vehicles to help your customers who may be looking for their federal tax refund. _____________________________________________________________________________________ The IRS may have a refund check waiting for you Thousands of tax refund checks go undelivered every year because people forget to tell the IRS or post office that their address changed. This year, more than 99,000 people are due refund checks averaging $1,547. Could one of them be you? If you think your refund check may have been returned to the IRS as undelivered, you should use the Where’s My Refund? tool on IRS.gov. This tool provides the status of your refund and, in some cases, instructions on how to resolve delivery problems. You can put an end to lost, stolen or undelivered checks by choosing direct deposit when you file either paper or electronic returns. Last year, more than 78.4 million people chose to receive their refund through direct deposit. You can receive refunds directly into your bank account, split a tax refund into two or three financial accounts or even buy a savings bond. You can also file your tax return electronically. E-file eliminates the risk of lost paper returns, reduces errors on tax returns and speeds up refunds. Nearly 8 out of 10 taxpayers chose e-file last year. E-file combined with direct deposit is the best option for avoiding refund problems. Plus, it’s easy, fast and safe.
    [Show full text]
  • Creating Market Incentives for Greener Products Policy Manual for Eastern Partnership Countries
    Creating Market Incentives for Greener Products Policy Manual for Eastern Partnership Countries Creating Incentives for Greener Products Policy Manual for Eastern Partnership Countries 2014 About the OECD The OECD is a unique forum where governments work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Union takes part in the work of the OECD. Since the 1990s, the OECD Task Force for the Implementation of the Environmental Action Programme (the EAP Task Force) has been supporting countries of Eastern Europe, Caucasus and Central Asia to reconcile their environment and economic goals. About the EaP GREEN programme The “Greening Economies in the European Union’s Eastern Neighbourhood” (EaP GREEN) programme aims to support the six Eastern Partnership countries to move towards green economy by decoupling economic growth from environmental degradation and resource depletion. The six EaP countries are: Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine.
    [Show full text]
  • PAYROLL TAX TABLES and EMPLOYEE and EMPLOYER RELATED EXPENSE RATES Updated: June 27, 2012 *Items Highlighted in Yellow Have Been Changed Since the Last Update
    PAYROLL TAX TABLES AND EMPLOYEE AND EMPLOYER RELATED EXPENSE RATES Updated: June 27, 2012 *items highlighted in yellow have been changed since the last update. Effective: July 1, 2012 FEDERAL WITHHOLDING 26 PAYS FEDERAL TAX ID NUMBER 86-6004791 RETIREMENT PLAN DEDUCTIONS 10.5% AT 50/50 10.5% AT 50/50 EMPLOYEE EMPLOYER (a) SINGLE person (including head of household) - CODE RETIREMENT PLAN DED OLD NEW DED OLD NEW If the amount of wages (after subtracting CODE RATE RATE CODE RATE RATE withholding allowances) is: The amount of income tax to withhold is: 1 ASRS PLAN-ASRS 7903 11.13% 10.90% 7904 9.87% 10.90% Not Over $83 ............................................................................................. $0 2 CORP JUVENILE CORRECTIONS (501) 7905 8.41% 8.41% 7906 9.92% 12.30% Over But not over - of excess over - 3 EORP ELECTED OFFICIALS & JUDGES (415) 7907 10.00% 11.50% 7908 17.96% 20.87% $83 - $417 10% $83 4 PSRS PUBLIC SAFETY (007) (ER pays 5% EE share) 7909 3.65% 4.55% 7910 38.30% 48.71% $417 - $1,442 $33.40 plus 15% $417 5 PSRS GAME & FISH (035) 7911 8.65% 9.55% 7912 43.35% 50.54% $1,442 - $3,377 $187.15 plus 25% $1,442 6 PSRS AG INVESTIGATORS (151) 7913 8.65% 9.55% 7914 90.08% 136.04% $3,377 - $6,954 $670.90 plus 28% $3,377 7 PSRS FIRE FIGHTERS (119) 7915 8.65% 9.55% 7916 17.76% 20.54% $6,954 - $15,019 $1,672.46 plus 33% $6,954 9 N/A NO RETIREMENT $15,019 ………………………………………………………$4,333.91 plus 35% $15,019 0 CORP CORRECTIONS (500) 7901 8.41% 8.41% 7902 9.15% 11.14% B PSRS LIQUOR CONTROL OFFICER (164) 7923 8.65% 9.55% 7924 38.77% 46.99% (b) MARRIED person F PSRS STATE PARKS (204) 7931 8.65% 9.55% 7932 18.50% 25.16% If the amount of wages (after subtracting G CORP PUBLIC SAFETY DISPATCHERS (563) 7933 7.96% 7.96% 7934 7.50% 7.90% withholding allowances) is: The amount of income tax to withhold is: H PSRS DEFERRED RET OPTION (DROP) 7957 8.65% 9.55% 0.24% AT 50/50 Not Over $312 ............................................................................................
    [Show full text]
  • Evaluation of Environmental Tax Reforms: International Experiences
    EVALUATION OF ENVIRONMENTAL TAX REFORMS: INTERNATIONAL EXPERIENCES Final Report Prepared by: Institute for European Environmental Policy (IEEP) 55 Quai au Foin 1000 Brussels Belgium 21 June 2013 Disclaimer: The arguments expressed in this report are solely those of the authors, and do not reflect the opinion of any other party. This report should be cited as follows: Withana, S., ten Brink, P., Kretschmer, B., Mazza, L., Hjerp, P., Sauter, R., (2013) Evaluation of environmental tax reforms: International experiences , A report by the Institute for European Environmental Policy (IEEP) for the State Secretariat for Economic Affairs (SECO) and the Federal Finance Administration (FFA) of Switzerland. Final Report. Brussels. 2013. Citation for report annexes: Withana, S., ten Brink, P., Kretschmer, B., Mazza, L., Hjerp, P., Sauter, R., Malou, A., and Illes, A., (2013) Annexes to Final Report - Evaluation of environmental tax reforms: International experiences . A report by the Institute for European Environmental Policy (IEEP) for the State Secretariat for Economic Affairs (SECO) and the Federal Finance Administration (FFA) of Switzerland. Brussels. 2013. Acknowledgements The authors would like to thank the following for their contributions to the study: Kai Schlegelmilch (Green Budget Europe); Stefan Speck (European Environment Agency - EEA); Herman Vollebergh (PBL – Netherlands Environmental Assessment Agency); Hans Vos (Independent); Mikael Skou Andersen (European Environment Agency – EEA); Frank Convery (University College Dublin); Aldo Ravazzi (Ministry of Environment, Italy); Vladislav Rezek (Ministry of Finance, Czech Republic); Frans Oosterhuis (Institute for Environmental Studies - Vrije Universiteit - IVM); Constanze Adolf (Green Budget Europe); and Janne Stene (Bellona). The authors would also like to thank the members of the Working Group accompanying the study: Carsten Colombier (Leiter) (EFV); Marianne Abt (SECO); Fabian Mahnig (EDA MAHFA); Nicole Mathys (BFE); Reto Stroh (EZV); Michel Tschirren (BAFU); and Martina Zahno (EFV).
    [Show full text]
  • Tax Us If You Can 2012 FINAL.Pdf
    City Research Online City, University of London Institutional Repository Citation: Murphy, R. and Christensen, J.F. (2012). Tax us if you can. Chesham, UK: Tax Justice Network. This is the published version of the paper. This version of the publication may differ from the final published version. Permanent repository link: https://openaccess.city.ac.uk/id/eprint/16543/ Link to published version: Copyright: City Research Online aims to make research outputs of City, University of London available to a wider audience. Copyright and Moral Rights remain with the author(s) and/or copyright holders. URLs from City Research Online may be freely distributed and linked to. Reuse: Copies of full items can be used for personal research or study, educational, or not-for-profit purposes without prior permission or charge. Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. City Research Online: http://openaccess.city.ac.uk/ [email protected] tax us nd if you can 2Edition INTRODUCTION TO THE TAX JUSTICE NETWORK The Tax Justice Network (TJN) brings together charities, non-governmental organisations, trade unions, social movements, churches and individuals with common interest in working for international tax co-operation and against tax avoidance, tax evasion and tax competition. What we share is our commitment to reducing poverty and inequality and enhancing the well being of the least well off around the world. In an era of globalisation, TJN is committed to a socially just, democratic and progressive system of taxation.
    [Show full text]
  • Income Tax Basics
    International Student Taxes Information compiled by International Student Services International Student Taxes • The Basics • Specific Tax Scenarios • What You Can Do Now • Resolving Tax Issues • Top Ten Tax Myths • Tax Resources THE BASICS Tax Basics • Taxes – What are they? – A financial charge imposed by a governing body upon a taxpayer in order to collect funds – Collected funds are used to carry out a variety of functions – There are many types of taxes • Income Tax – A financial charge imposed on income earned by an individual or business – Income can be taxed at the local, state and federal (i.e. national) level. – This session primarily focuses on Federal Income Taxes • Internal Revenue Service (IRS) – The unit of the U.S. federal government responsible for administering and enforcing tax laws – www.irs.gov • Tax Year – January 1 – December 31 • Why should you care about taxes? – Paying income taxes and filing the appropriate paperwork with the IRS is required by law in the U.S. – Failure to comply can result in serious immigration, financial, and legal consequences Income Tax Basics • How are Income Taxes paid? – It is the taxpayer’s (i.e. YOUR) responsibility to pay tax obligation to IRS – Most common process: 1. Portion of your income is withheld from each paycheck throughout the year by your employer 2. Employer pays the withheld income to IRS on your behalf during the year 3. Each year, you file tax return to summarize tax obligations and payments for the prior tax year • What is a tax return? – A report that YOU file with the IRS to… 1.
    [Show full text]
  • Chapter 17: Tax Treaties
    Chapter 17 Tax Treaties www.pwc.com/mt/doingbusiness Doing Business in Malta Tax treaty policy Since the mid-seventies Malta has sought to expand its However, the tax levied on the companies under the Income tax treaty network. Most of Malta’s treaties are based Tax Act in such situations will be directly limited to 15% on the OECD model although some treaties (particularly as if the treaty rate applied to the company profits. Rather older ones) contain some material variations therefrom. than a refund on the payment of dividends the investors Some of them include special tax incentives for foreign can therefore qualify for the reduced rate at the company enterprises setting up manufacturing establishments in level at the time that the profits are derived and without Malta. These consist typically in low tax rates on dividends any obligation to distribute the profits to benefit from the arising in Malta supported by tax sparing provisions. Malta’s reduced tax rate. Maltese domestic law also provides that economic development, and particularly the growth in its no tax is payable by non-residents on interest and royalties financial services sector, expanded the scope for tax treaties arising in Malta, subject to certain conditions (see Chapter and in fact currently Malta has over 70 double taxation 11) and, as stated above, this rule applies irrespective of the agreements with almost all the important OECD countries. treaty provisions dealing with withholding taxes on these The current list of tax treaties is given in Appendix VII. categories of income. Similarly, no tax is payable by non- A tax treaty concluded by Malta becomes law by Ministerial residents on capital gains arising on transfers of company order and the provisions arising therefrom apply shares or securities, except where such gains are derived notwithstanding any provisions to the contrary under from the transfer of shares or securities in companies whose Maltese domestic tax law.
    [Show full text]
  • Annual Report 2006
    89 MMiinniissttrryy ooff FFiinnaannccee _________________________________________________________________________________________________________ Annual Reports of Government Departments ~ 2006 Ministry of Finance 90 Special Projects Division BACKGROUND The Special Projects Office has the function to undertake and implement a wide variety of initiatives some of which are of a corporate nature and others involving specific Ministry of Finance departments. The major corporate projects undertaken in the year under review were related to overseeing the development of: (a) Accrual Accounting; (b) eProcurement; and (c) eArchiving. Other assignments undertaken during the period under review range from the organisational reform of the revenue earning departments within the Ministry of Finance to the activities of the Co-ordinating Task Force for Own Resources. ACCRUAL ACCOUNTING Work is continuing on the introduction of accrual accounting at all ministries and their respective government departments. Accrual accounting will have a major impact on the way the internal financial business of Government will be conducted, particularly in areas of asset management and the management of debtors and creditors. This financial reform process will cross ministerial and departmental organisational boundaries and have a major influence on the departmental processes related to their day-to- day financial administration. Accrual accounting will provide more meaningful financial information that will enhance the quality of the Government's financial decision-making
    [Show full text]
  • Investment in Panama 2019
    Investment in Panama 2019 KPMG in Panama Investment in Panama | 1 © 2019 by KPMG © 2012 by KPMG © 2009 by KPMG © 2006 by KPMG © 2000 by KPMG © 1996 by KPMG © 1992 by KPMG Peat Marwick © 1984 by Peat Marwick Mitchell & Co. All rights reserved KPMG, a Panamanian civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Images of the Panama-Pacific Special Economic Area are courtesy of London and Regional Panama. Investment in Panama | 2 Contents Chapter 1 ...................................................................................................................................................... 9 Panama at a Glance .................................................................................................................................... 9 Geography and Climate ............................................................................................................................ 9 History ....................................................................................................................................................... 9 Government ............................................................................................................................................ 10 Population, Languages and Religion ...................................................................................................... 10 General State Budget .............................................................................................................................
    [Show full text]
  • Immigration During the Crown Colony Period, 1840-1852
    1 2: Immigration during the Crown Colony period, 1840-1852 Context In 1840 New Zealand became, formally, a part of the British Empire. The small and irregular inflow of British immigrants from the Australian Colonies – the ‘Old New Zealanders’ of the mission stations, whaling stations, timber depots, trader settlements, and small pastoral and agricultural outposts, mostly scattered along the coasts - abruptly gave way to the first of a number of waves of immigrants which flowed in from 1840.1 At least three streams arrived during the period 1840-1852, although ‘Old New Zealanders’ continued to arrive in small numbers during the 1840s. The first consisted of the government officials, merchants, pastoralists, and other independent arrivals, the second of the ‘colonists’ (or land purchasers) and the ‘emigrants’ (or assisted arrivals) of the New Zealand Company and its affiliates, and the third of the imperial soldiers (and some sailors) who began arriving in 1845. New Zealand’s European population grew rapidly, marked by the establishment of urban communities, the colonial capital of Auckland (1840), and the Company settlements of Wellington (1840), Petre (Wanganui, 1840), New Plymouth (1841), Nelson (1842), Otago (1848), and Canterbury (1850). Into Auckland flowed most of the independent and military streams, and into the company settlements those arriving directly from the United Kingdom. Thus A.S.Thomson observed that ‘The northern [Auckland] settlers were chiefly derived from Australia; those in the south from Great Britain. The former,’ he added, ‘were distinguished for colonial wisdom; the latter for education and good home connections …’2 Annexation occurred at a time when emigration from the United Kingdom was rising.
    [Show full text]
  • Can My Church Benefit from a CARES Act Forgivable Loan?
    I hope this finds you well and living confidently into the times. Congress passed and the President signed the CARES Act this past Friday, March 27, 2020. I write to share specific information from the CARES Act that answers some of the questions that I have heard being asked. Can my church benefit from a CARES Act forgivable loan? This question is on the minds of most pastors and church leaders since the passage of the $2 trillion relief package. As I continue to participate in some and receive information from other webcasts and conference calls across the connection, there are some things you can begin to do to prepare to apply for the loan program. While I do not encourage you to borrow funds for normal operating expenses, it appears that this loan has the potential to become a grant that you would not need to repay. Attorneys and accountants are studying the bill and awaiting guidelines from the Small Business Administration (SBA) and the U.S. Treasury on how the CARES Act will be administered. However, it appears that churches and non-profits may be able to borrow money that could be completely forgiven if they maintain their previous 12-month staffing levels through June of 2020. Key Provisions: • Paycheck Protection Program (“PPP”) - Eligible churches and non-profits will be able to borrow up to 2.5 times their average monthly payroll and benefits up to $100,000. While this appears to cap the amount to approximately $40,000 of monthly current costs, it is not yet known if that is for all employees in the salary-paying entity or per person.
    [Show full text]
  • Use IRS Withholding Calculator to Adjust Your Withholding
    Sample article for organizations to use to reach customers (320 word count) Customize and post the following article on your websites and/or use in other communication vehicles to inform your readers about how to adjust their withholding. ____________________________________________________________________________ Use IRS Withholding Calculator to Adjust Your Withholding When your federal tax return is completed, you may discover that you’ll either receive a tax refund or owe money. If either of these amounts is substantial, it’s probably time for you to review your withholding election. If you owe a substantial amount of tax, you may need to increase the amount of taxes being withheld from each paycheck you receive. If you are receiving a substantial refund, you may elect to reduce the amount of taxes being withheld from your paychecks. In both cases, the ultimate goal is to get as close to a zero balance at the end of the year as possible. If you find that you owe a significant amount of tax at the end of the year, adjusting your Form W-4 for additional withholding will mean a little less take home pay in each paycheck, but it will eliminate the need to pay taxes at the end of the year. And if you receive a very large refund, a reduction in the amount withheld will mean a little more take home pay in each paycheck to help with day-to-day living expenses. Examples of events that can have a significant impact on your tax liability and require an adjustment to withholding or the number of allowances that you claim on your Form W-4 include: • Change in marital status • Loss of a dependent • Birth or adoption of a child Regardless of your reasons for choosing to review or change your withholdings, IRS provides an excellent interactive online tool to help you make the most informed decision.
    [Show full text]