GMS - INTERNATIONAL MOBILITY OF TALENT 
ANTICIPATE TAX, LEGAL, LABOR, AND CULTURAL ISSUES

Mexico is among the 10 most visited countries in the world, and there is also a great deal of international labor mobility in our country. Therefore, it is extremely important that organizations with employees who will be assigned to another jurisdiction have detailed knowledge of all aspects related to tax, immigration, and labor legislation that allow them to assess in advance the tax impacts, immigration issues for the employee and also, in some cases, their family, as well as cultural issues that need to be known for better adaptation to the new social environment. Below are brief comments on these aspects.

On the tax side, there is no doubt that the issue of tax residence must be addressed, given that there is a significant difference in the tax treatment of income received (salaries, fees, interest, rents, dividends, etc.) by the employee for income tax purposes depending on whether the employee is a tax resident of Mexico or not, and international tax treaties (ISR) must definitely be taken into account. It is worth mentioning that, in terms of social security, Mexico has signed two international treaties, with Spain and Canada, so it is essential to consider these treaties if employees are assigned from these countries. In addition, it should be remembered that companies that employ foreign residents for dependent personal services are jointly and severally liable for the payment of taxes when such foreigners are subject to such payment in Mexico; a situation that becomes relevant and important in terms of verifying the tax status of each foreigner within a Mexican organization.

Currently, it takes a certain amount of time to obtain immigration permits, and there is no definite time frame for obtaining a temporary or permanent residence, with or without work permit. It is therefore recommended that the necessary steps and appointments be made in advance to complete these procedures prior to the employee's commencement of professional activities.

Employment issues must be formalized between the employer and employee through the corresponding individual employment contract, and for international mobility, the letter of assignment, which commonly contains, among other issues, the date of assignment, annual salary, vacations, bonuses, housing, food and school support, language classes, life insurance, and health expenses. In terms of employment, if the employee is hired by a Mexican company, it will be necessary to identify the benefits established in the letter of assignment in order to make the necessary adjustments in accordance with our labor legislation and even avoid tax issues related to deductions for companies. The assignment letter gives us a glimpse of the tax issue; however, it is always advisable to have a detailed conversation with the employee to determine the correct path in tax matters and avoid surprises and unwanted impacts for the employee.

The cultural aspect is important both personally and for the family. Learning the language of the new country could be a great help in integrating into the new social environment. Good communication and empathy are undoubtedly allies for cultural adaptation. Organizations should consider providing emotional well-being support. In some cases, being far from family and friends can cause emotional distress.

All the above issues are highly relevant to international labor mobility. Seek appropriate and timely advice on each of them to avoid risks and unpleasant surprises for the company and/or the employee.