Global Tax Chat Recap: A Round-the-World Tour of Tax Trends and U.S. Developments

I had the pleasure of joining my colleagues Pat Jurgens and Jeremy Piccoli for our second Global Tax Chat of the year. We traveled virtually around the world to explore the latest tax changes impacting global mobility. From regional updates in Malaysia and the Netherlands to key developments in the U.S., there was no shortage of important takeaways for mobility professionals.

If you weren’t able to join us live, don’t worry—the session was recorded and is available to watch on demand.

Global Tax Updates

Malaysia: New EPF Contributions for Foreign Nationals

Malaysia’s recent amendment to its Employee Provident Fund (EPF) introduces mandatory contributions for foreign national employees—2% from the employee and 2% from the employer. Historically, expatriates in Malaysia were exempt, but beginning in Q4 2025, all inbound assignments will see a baseline cost increase of 4%. This is especially impactful for companies sending talent into a country without totalization agreements in place, where pension obligations add directly to assignment expenses. Organizations should begin factoring this into their cost planning strategies now.

United Kingdom: Enter the FIG Regime

In the UK, we said goodbye to the non-dom regime and hello to the Foreign Income and Gains (FIG) scheme. This policy allows eligible individuals to exclude certain types of foreign income and capital gains for up to four years, while also offering Overseas Workday Relief for time spent working outside the UK. However, this benefit comes with increased compliance complexity. Annual elections are required, additional disclosures must be made on UK tax returns, and personal allowances are forfeited. While the regime aims to attract inbound talent, employers and mobility managers will need to navigate these new administrative demands with care.

Russia: Tax Rates on the Rise

Russia is shifting away from its historically low flat tax structure, implementing new graduated tax rates of 18%, 20%, and 22% starting in 2025. This change follows a previous adjustment in 2021 when the flat rate was first increased from 13% to 15%. The current adjustments are being framed as reforms but are widely understood to be linked to increased military spending. With a strong ruble and rising interest rates already adding to assignment costs, this development raises important questions about the viability of long-term assignments in Russia.

The Netherlands: Rebranding the “30% Ruling”

We’ve long relied on the Dutch 30% ruling to support assignments into the Netherlands, but as of 2027, that figure will drop to 27%.For years, the Dutch 30% ruling has been a major draw for inbound mobility. Starting in 2027, the government will reduce this benefit to 27% for a maximum of five years. Originally, a phased tapering approach had been proposed but was deemed too complex. This new one-step reduction offers clarity, but still changes the economic equation for mobility into the Netherlands. Employers should update internal references and tax planning tools to reflect this change, and begin communicating with impacted employees well ahead of the transition. Many of us will need to adjust our terminology as we transition to what might be better called simply the “Dutch ruling.”

Back on U.S. Soil: Tax and Policy Trends at Home

TCJA Expiration and the Proposed “OBBB”

The Tax Cuts and Jobs Act (TCJA) is set to expire in 2025, and legislative efforts are underway to replace it with what’s currently being called the One Big Beautiful Bill (OBBB). The bill proposes to make many TCJA provisions permanent—including the 37% top marginal rate, expanded standard deductions, and the cap on SALT deductions. There are also proposed temporary incentives like deductions for tips and premium overtime pay, but these would only last four years and remain subject to FICA and Medicare. The evolving legislation introduces considerable uncertainty, and now is the time for companies to begin modeling potential tax scenarios and assessing how these changes could impact mobile employee compensation.

IRS Workforce Declines and Processing Delays

It’s no secret that the IRS has seen some turbulence lately. The IRS is undergoing substantial staffing challenges, having lost nearly a third of its revenue agents in early 2025. Overall workforce reductions have reached at least 11%, leading to slower processing times for returns, refunds, audits, and other administrative actions. These delays, combined with a growing tax gap, place a greater burden on taxpayers to maintain accurate records and robust compliance processes. Interestingly, there is also a noticeable shift in enforcement focus, with more attention now being placed on immigration-related tax concerns, rather than traditional white-collar audit priorities.

Tariffs and Talent Strategy

While often viewed through the lens of trade, tariffs can have significant downstream effects on mobility. Ongoing policy proposals include a broad-based 10% tariff and a potential new “External Revenue Service” to manage collections. As companies adjust supply chains and reevaluate where production and operations occur, global mobility teams should stay tightly connected to business leaders. Trade shifts often trigger new cross-border movement, and early coordination is essential for effective planning. Additionally, new trade agreements—like those recently signed between the U.S. and UK, and the UK and India—may increase assignment activity and require fresh cost modeling.

Does the Pope File U.S. Taxes?

We couldn’t resist throwing in a fun audience poll during the session. With Pope Leo XIV, the new head of Vatican City, holding dual citizenship with the U.S. and Peru, we asked: will he have to file a U.S. tax return? Our audience of fellow tax geeks leaned yes—some said he might have no income to report, others expected full FBAR and FATCA filings. Either way, it was a great reminder that global tax rules don’t take a break for religious figures!

Poll Question: Pope Leo XIV, recently elected head of the Catholic Church, is a dual national U.S. and Peru citizen. Will Pope Leo need to file U.S. tax returns? Single choice

• No, Pope Leo XIV is the Head of the Vatican - 7%
• Yes, but he would not have any income to declare - 30%
• Yes, including all U.S. expatriate tax rules, FBAR’s and FATCA filings - 43%
• Maybe he should give up his U.S. citizenship - 5%
• I don’t know - 14.9%

Final Thoughts: What Mobility Teams Should Do Now

From shifting regional rules to federal legislation still in flux, our message throughout the session was clear: stay proactive, stay connected, and stay informed

Here are three things you can do today:

• Reassess cost assumptions for Malaysia, Russia, and the Netherlands.
• Follow U.S. tax reform developments and begin scenario planning.
• Align your tax and mobility functions as tariffs and trade policy reshape talent flows.

Thanks again for joining us for this global tour. And if you missed the live session, click here to watch the show. If you have questions about how these developments might affect your program, don’t hesitate to reach out. Until next time—safe travels and smart planning!