COVID-19 has exacerbated an already challenging framework of travel compliance regulations for corporations.

Not only were many employees stranded abroad when national lockdowns were imposed without warning, employees have now adapted to remote working and more and more they are requesting to work from overseas.

Both the planned and unplanned working arrangements have wide-ranging knock-on effects with respect to tax and immigration compliance.

While the pandemic has created a lot of uncertainty and prevented many business trips this year, one thing that is more apparent than ever: the importance of a watertight corporate travel policy and compliance measures to protect your organization and your people.

The travel compliance nightmare: Fact or Fiction?

It is a widely held belief that only long-term travel arrangements will give rise to a compliance obligation. As Michelle Berners-Price, Director, Global Mobility Services KPMG explains, the fact is, that in many cases, such obligations arise from the moment a business trip is planned. Take for example the need to obtain a work permit or visa.

This is particularly relevant in light of Brexit which is having a real impact on people who previously wouldn’t have thought about needing documentation for EU travel. It will also come as a surprise to some, that tax and social security obligations can arise from day one of a business trip depending on a complex network of treaties.

In Europe, the current hot topic is the Posted Workers Directive which aims to protect employment rights of employees working temporarily in an EU/EEA Member State. Where the Directive has been adopted, it is a requirement to register details of the posting with the host country authorities before the business trip takes place.

The criteria for when and why a posting must be registered vary from state to state, and the requirements can be onerous - including obligations to retain documents such as pay slips and timesheets as evidence of the employee's rights.

Why should travel compliance be on travel managers' radar?

Business travel and remote working compliance obligations and risks are clearly complex, wide ranging and impact several stakeholders. Rules and regulations are different across countries and will vary depending on the country combination and the personal details of the employee such as their nationality. It’s completely feasible that employees working from the same destination may have to fulfill different requirements and the businesses’ obligations in respect to them may differ.

Corporations have their work cut out for them to put in place the right processes and tools to address the change in working patterns that has emerged as a result of the COVID-19 pandemic and has now become the new normal. Added to this are the concerns around personal data security as governments rush to change from traditional to electronic requests for passports and visas.

Travel managers must be aware of the rules and vigilant to change as non-compliance can have serious consequences ranging from extra taxes, fines, and even legal sanctions. The impact on the employee should not be overlooked either. Employees expect to be protected by their employer when travelling for work and it is a key factor in employee retention.

Digitalization is helping corporations be compliant and minimize risk

Technology will provide organizations with the means to protect themselves from unnecessary risk and ensure that in the event of an audit, they can be confident that adequate steps have been taken to ensure compliance obligations were upheld.

With the right travel compliance processes and tools in place, corporate travelers can get back on the road safely, and companies can rest assured that they are paying due respect to regulations and their duty of care to their employees.

Want to know more? Watch the webinar where KPMG, Amadeus and VisaHQ teamed up to discuss this topic.

Jorge Pérez, Partner Development Director, Corporations Alliances Partnerships, Amadeus