Organisations with overseas subsidiaries have countless issues to contend with. The intricacies of differing business practices. Variations in business and employment law. Cultural and language differences. Another issue which may have just as many ramifications, but is often much less-known, is the taxation and compliance impact of employees’ reimbursable expenses.

At first glance, this could seem like somewhat of a non-issue. Employees submit their travel, entertainment of other expenses, and they get reimbursed back into their bank accounts. However, it is rarely this simple, and if organizations are unaware of the tax and other regulatory implications of expense management, they could open themselves up to significant potential for financial loss and legal liability.

Take personal vehicle reimbursement, for example. In the U.S., there is a standard reimbursement rate set by the Internal Revenue Service of 54.5 cents per mile, regardless of any other factors. In other countries, the amount reimbursable can vary dependent on a variety of factors, such as the engine size of the vehicle and the number of passengers in the car. Similar regulations apply for a wide range of expense items, from lodging to meals to personal mobile phone usage.

There are also countless different regulations in place worldwide for regulations such as sales tax (VAT/GST, etc.) reclaim, electronic and paper receipt storage rule, VAT invoice requirements, and so on. While this may be tricky to track for one country, any organization which has operations across multiple overseas markets could find this to be a colossal headache to manage and remain in compliance.

How can companies make the process of international expense submission and compliance easier for both their end-users and finance departments? First is offering an expense management solution that makes it easier for international employees to submit and be correctly reimbursed for their expenses. For example, in France, reimbursement for a business journey by car is based on the horsepower of the car and the total amount of kilometers driven over a calendar year. Therefore, the expense solution needs to not just calculate the distance driven on an individual trip, but also needs to be able to keep track of overall distance driven. Many other countries have similarly complex regulations, that the end-user interface must be able to support. A highly-configurable solution that provides the ability for travellers to accurately enter expenses is critical for organisations to remain compliant.

Remaining compliant with global regulatory tax requirements doesn’t just mean providing a solution that meets the direct needs of business travellers submitting their expenses. Companies also need to ensure that they are aware of the underlying regulations in each market, are aware of any changes or new regulations, and adjust their expense reimbursement and reporting requirements accordingly. While some of these are straightforward annual changes (like mileage deductions), others may be more nuanced in the way that they are applied.

In order to help companies navigate the complex global regulatory environment, we are very happy to be working with global professional services firm PwC to offer comprehensive global templates for expense reimbursement compliance. Chrome River’s customers can subscribe to receive automatic updates across a wide range of taxation, regulatory and expense data points, such as VAT/GST, mileage reimbursement and meals/lodging rates. They can then leverage this data to enable them to follow the complex recovery rules for VAT/GST on employee expenses while adhering to best-practice regulations for items such as receipt retention.

Of course, there is no one-size-fits all approach to tax and regulatory issues as they pertain to employee expenses, and just as individuals may take a different approach to taxes, companies should also ensure how different taxation requirements impact them. However, with Chrome River’s new product, organisations can be reassured that they will get the most accurate and up-to-date global information, helping them to remain compliant and further streamlining the role of the finance team.


Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care. Sally Abella, Director of Corporate Travel Harman International
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic. Ben Zastrow Zelle