Mobility Matters

COVID-19: Potential impact on expatriate travel and tax costs

April 1, 2020
By Melissa Duffy and Carolyn Chambers, KPMG International member firm in South Africa



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In a very short space of time, the world has gone from "normal" to "disrupted". Globally, disruption has become an every-day experience for most businesses. However, with the advent of COVID-19 and the Coronavirus which have spread with such voracity thus far, we are experiencing a different kind of disruption. This impacts, amongst others, the global movement of assignees. Expatriate program professionals need to be aware of this potential impact. 

Why is this important?

Most international assignments and many business travel arrangements are planned, taking into account the tax laws of the countries involved. The tax consequences can generally be determined in advance and many companies take advice and plan well in advance to help avoid unnecessary double-taxation costs for the individuals or the business. With travel bans resulting from the rapid spread of COVID-19, however, these plans may not work out the way they were intended.

What are some of the immediate global impacts of the spread of COVID-19?

The following are some of the developments we are observing in relation to employee travel:

  • Manufacturing closures in the People’s Republic of China and other large global contributors to manufacturing – making it difficult to obtain materials and requiring changes to processes;
  • Increased travel restrictions across many countries globally – preventing global mobility required to meet business objectives;
  • Increasing public health requirements preventing public gatherings;
  • Additional border checks and required quarantines on entering a country, resulting in unexpected delays in moving people between countries;
  • Uncertainty at seaports and airports, travel delays, extra checks and screenings, etc.;
  • Sunk costs incurred by employers now that work visas (previously granted) have been revoked or application processing is at a halt.

What is the immediate potential tax and immigration impact for expatriates and business?

  • Some countries have announced changes in legislation allowing for delayed tax return submission or tax payments;
  • Potential tax exposure and double taxation may result from early termination or unintended extension of assignments and/or business trips due to travel bans that may have consequences in terms of residency status, permanent establishment risk, etc.;
  • Additional tax compliance requirements may arise in additional countries as expanded on below;
  • Employers may  incur additional/duplicate visa application costs and even inability to obtain new visa, extend visa, or change visa status to the extent that work visas need to be reissued or extended.

Some of the details

The impact of travel bans and lack of control over where an employer’s assignees or business travellers may find themselves, may lead to increased tax costs in a particular country and if not managed properly, also globally, as a result of unforeseen double taxation.

Formal Secondment Arrangements - Impact

By way of example, where a South African citizen and tax resident was on assignment to the U.K., with the intention of claiming the foreign remuneration (Section 10(1)(o)(ii)) exemption from tax in South Africa, if forced to return home earlier than planned due to travel restrictions, he/she may lose the ability to claim the exemption. 

Where he/she has incurred a tax liability in the U.K. as a result of the period of the assignment there, this has the potential to lead to double taxation. If not managed properly, this double taxation could be at best a cash-flow problem for the business, and at worst, a permanent double taxation cost.

Business Travel Arrangements - Impact

In relation to business travellers, where an individual has managed his/her travel to help ensure no additional tax cost is incurred by presence in another country, but is unable to travel home due to a travel ban, he/she may incur an unexpected liability in another country, with unexpected tax compliance costs.

Important Action Steps

Whether considering a formal secondment arrangement or business travel arrangement that has been impacted by COVDI-19 travel restrictions or delays, it is essential to consider the following:

  • What are the current legislative impacts for each country?
  • Is there a potential to avoid double taxation altogether?
  • Are there steps to be taken to reclaim taxes paid from either country if they need to be paid initially?
  • What tax compliance requirements are in place in each country, given the change of circumstances?
  • Have any relief measures been granted in either country that could apply to the situation faced by the assignee/business traveller? 
  • Does the employer have an expatriate policy in place to help ensure equitable treatment of mobile employees in these very fluid circumstances?

When planning new secondments or business travel arrangements, assuming that travel bans no longer impact them, it is essential that the above considerations are taken into account in advance of travel.


It is business "unusual" in very unusual times, and so much is changing every day as the impact of COVID-19 changes the way we live and work. It is essential that we keep updated on any changes taking place in relation to government and business responses to the COVID-19 crisis to adapt the way we do business, the way we live and travel, and, in general, the way we interact with each other. Governments are expected to proactively legislate as quickly as possible to negate the potential impact on employers and their globally mobile employee populations – we have already seen this in some countries and hope to see more clarity and guidance being issued by tax and immigration authorities around the world. This is an ever-changing landscape and must be monitored carefully.

To avoid unnecessary additional increased tax costs, it is recommended that employers take professional advice and plan as much as possible for the actual situation they face and for contingencies, bearing in mind the rapid pace of change.

For updates on the COVID-19 crisis and global mobility, you may refer to the webpage featuring GMS Flash Alerts dealing with COVID-19-related matters, whether they be tax, social security, immigration, or labour law at: