Trump's proposed tax changes could significantly increase costs for US employees and businesses moving around the world
According to audit firm Blick Rothenberg, the tax reform proposed by President Donald Trump in his so-called “a big and beautiful bill” could significantly increase the costs associated with global liquidity for U.S. employers and international mobile employees.
The title change has a proposed incremental tax revenue for countries with “unfair taxation systems” that starts at 5% and rises to 20%. The impact on multinational corporations and global mobile people may be large, especially without forward-looking plans.
“It's not just a change in the title – it's a big concern for employers and employees around the world,” said David Livitt, partner at Blick Rothenberg.
Who could be affected?
The proposed changes will affect a wide range of internationally connected individuals and businesses, including:
- Former U.S. residents who have income from the U.S.: Residents who continue to receive bonuses, stock spending or deferred compensation after leaving the country, although no longer resident, may still face higher tax rates.
- Employees with Tax Equilibrium Programs: These programs are common in global mobility programs, ensuring that employers cover tax bills for overseas tasks. If the tax rate rises, the allocation costs increase – potentially undermining the viability of future international posts.
- Employees who move to the U.S. mid-year: People who move to the U.S. may not immediately receive full tax residency, exposing annual income to parts to higher tax rates.
- Employees leaving the U.S. at the end of the year: Those who set out during the tax year may find income taxed at higher rates on income such as stock ownership or bonuses.
“These rules mean that taxes can be taxed more severely based on the time of income or the residence at the time of payment,” Livitt explained. “In many cases, employers give the bill through tax equilibrium.”
What can a company do?
Livitt stressed the importance of early planning, urging companies to take positive action before the new tax regime could begin in 2026.
Key suggestions include:
- Wise timed payments: advance bonus or stock payments until 2025, with relatively high interest rates ahead of schedule. This is especially useful for employees who relocate or receive lagging income.
- Review stock ownership timeline: With RSU or stock options set in early 2026, consider accelerating them to 2025 to avoid triggering higher marginal interest rates or additional copies of foreign revenue.
- Consider Alternative Stock Compensation: Issuing Incentive Stock Options (ISOs) may be a more taxable approach than non-qualified options, although companies must consider the impact of alternative minimum taxes.
- Delayed income in 2026 (when feasible): Delayed income can reduce exposure for employees entering the next tax stage (such as after distribution or after retirement).
- Maximize the benefits of tax benefits: Making full use of employer-sponsored tax layoff programs can mask more high tax annual income, thereby reducing the burden on employees and employers.
Take action now and plan ahead
“These proposed changes could have a significant impact on mobile workforce and highly compensated employees,” Levitt concluded. “It’s time to actively plan to lead the very different tax landscape in 2026.”
As Trump’s tax plans gain political appeal, companies with global mobile teams may need to rethink how they structure compensation, plan to allocate and manage tax risks, or risk facing unexpected financial and compliance challenges in the coming years.
