Whether you or someone in your organization will be working outside the U.S. temporarily or if you are hiring an individual to work for Cornell outside the U.S., there are important considerations you, your department, and college/unit need to be aware of.
Tax considerations for the traveler/foreign worker
- An employee working temporarily or permanently in a foreign location is subject to the laws of that country.
- Absent a tax treaty, a traveler or foreign worker may be subject to taxation on money earned while in the country from day one.
- Even where a tax treaty exists, a traveler is typically only protected from local country taxation for between 90 and 183 days. If in-country work extends beyond that, the individual is potentially subject to taxation in the foreign country.
- Cornell recommends that you consult with a personal income tax advisor to understand any personal tax obligations your foreign activities may trigger.
Tax considerations for the department/unit and University hiring or sending employees outside the U.S.
- Outside the U.S. Cornell University is generally treated as a for-profit corporation. As such, any revenues earned from foreign activities/locations are potentially subject to foreign taxation.
- Tax treaties are not available in all countries and, even where available, generally only protect the university from taxation if the university’s activities in a country last less than between 90 and 183 days.
- In countries without tax treaties, Cornell is may be immediately subject to taxation in a foreign country.
- Under the University’s Tax Sharing Procedure, if a college’s/unit’s activities trigger a tax filing or liability, the tax and associated compliance costs will be borne by the college/unit conducting the activities.
- It is strongly recommended that you email email@example.com before any non-U.S. activities occur for an assessment of the potential tax costs that may be triggered by your contemplated activities.
Benefits while abroad
Faculty and employees working on short-term Cornell projects overseas will generally retain their university benefits, such as health insurance and retirement plans, when they continue to be paid through the U.S. payroll.
Consult with your HR representative and medical insurance provider, prior to an international activity, to review your existing coverage and benefit capabilities in the to which country you will be traveling.