Employers considering transferring an Australian employee to their overseas operation should be aware of the following:
In the letter of introduction and undertaking to domicile salaries, the writer requests for a client to be admitted for salary payments into an offshore bank. He made the request due to the beneficial tax packages offered by the bank. Paying salaries into offshore bank, according to the writer, is a way of ensuring no tax is payable on profits derived by local beneficiaries.
This is an ATTACHMENT to your DECLARATION OF INTENTION OF EMPLOYMENT. It’s a letter from your prospective employer offering you a position and providing an undertaking to domicile your salary for tax purposes. This document is only required for those who are not residents of the United States and are not U.S. citizens or permanent residents.
All my tax clients have asked me the same question, “If I establish a company in Malta (or any other offshore location) will I be able to avoid paying tax in my own country?” The answer is no! The only way you can avoid paying tax in your home jurisdiction is by making sure that you do not earn a single cent from any source or activity related to your business in Malta or any other jurisdiction.
A LETTER OF INTRODUCTION AND UNDERTAKING TO DOMICILE SALARIES is the document that the expatriate employee will use to open a bank account in the host country.
LETTER OF INTRODUCTION AND UNDERTAKING TO DOMICILE SALARIES
We are aware that John E. John a staff in Nigeria Immigration Service with staff number 275** has approached your bank for a personal loan in the sum of N940,000 for a period of 36 months. We hereby confirm that he is a confirmed staff and that we strongly recommend him for the loan. We also irrevocably and unconditionally undertaken:
- To continue to domicile his salary account number 1740***** with Polaris Bank Ltd and shall NOT transfer it without the written consent of the Bank.
- In the event of disengagement of the above named employee from the services of our organization as a result of resignation or termination or dismissal, the organizational shall notify the Bank in writing within two (2) weeks of the employee’s disengagement.
- His full and final entitlements/exist benefit which shall be advised in writing to the Bank shall be paid to his Account Number 1740******** with Polaris Bank Ltd. in the event of his disengagement from this organization.
NAME: K. I John SIGNATURE:…………………
DEPUTY COMPTROLLER OF IMMIGRATION (SALARIES) DATE:………………………….
FOR: COMPTROLLER AKWA IBOM STATE COMMAND OFFICIAL STAMP: