U. S. citizens working abroad: Employers' tax problems and responsibilities;

              U.S. Citizens working abroad:
Employers' Tax Problems
and Responsibilities
by D. Bradley McWilliams
The last two decades have seen an unmatched ex­pansion
in the overseas operations of U. S. companies.
Although the trend is to staff overseas operations with
as many foreign nationals as possible, every year sees
a growth in the number of U. S. citizens working abroad.
Thus, the problem of taxing the expatriate employee,
the U. S. citizen working abroad, is of increasing con­cern.
There have been numerous articles written on the
tax problems confronting the expatriate employee, but
few exist which have dealt with the equally complex
problems of his employer. This article is intended to fill
that gap.
The application of income tax withholding and social
security to an expatriate presents unusual problems. To
set the stage for a review of these problems, a brief
outline of the basic fact patterns is appropriate. An
expatriate assigned or transferred to a foreign subsidi­ary
company may remain entirely on the payroll of the
parent company even though he performs all of his
services for the subsidiary company. Arrangements of
this type are generally the result of the tax laws or prac­tices
in the country to which he is assigned. The ex­patriate
may, however, be paid exclusively by the for­eign
subsidiary or he may be paid in part by the parent
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