APA Global Payroll & International Compliance Flashcards
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Read the first 6 APA Global Payroll & International Compliance flashcards as text
Which IRS test is used to determine if a foreign national in the US is a resident alien for federal income tax withholding purposes?
Answer: The Substantial Presence Test
The Substantial Presence Test counts days physically present in the US over a three-year period to determine resident alien status for tax purposes.
What is a 'split payroll' arrangement commonly used for in expatriate payroll?
Answer: Paying part of the expatriate's compensation in the home country currency and part in the host country currency
Split payroll divides an expatriate's compensation between home and host country currencies to cover local living expenses while maintaining home-country financial obligations.
Under the US-Canada totalization agreement, which factor primarily determines which country's social security system covers a US citizen temporarily assigned to Canada?
Answer: The expected duration of the assignment and country of origin
Totalization agreements use assignment duration and the employee's home country to determine coverage, with temporary assignees typically remaining covered by their home country's system.
What is the FBAR filing requirement relevant to payroll professionals managing foreign bank accounts for payroll disbursement?
Answer: Reporting foreign financial accounts over $10,000 to FinCEN using FinCEN Form 114
The FBAR (FinCEN Form 114) requires US persons to report foreign financial accounts with balances exceeding $10,000 to the Financial Crimes Enforcement Network.
When must a US employer file Form 1042 with the IRS?
Answer: Annually by March 15, to report tax withheld from US-source income paid to foreign persons
Form 1042 is an annual return filed by March 15 that summarizes US-source income paid to foreign persons and the tax withheld during the prior year.
Which strategy helps multinational payroll teams maintain consistency when each country has different pay frequencies and pay dates?
Answer: Using a global payroll calendar that maps each country's local schedule and consolidates reporting deadlines
A global payroll calendar provides a centralized view of all country-specific pay dates, tax deadlines, and reporting requirements, enabling consistent oversight.