There is a two-part package of good news for US residents taking overseas assignments, consisting of tax equalisation policies followed by most large employers and tax benefits provided in the Internal Revenue Code. The bad news is that the tax benefits have been whittled away, costing some overseas assignees tidy sums.

More than 90 per cent of the companies surveyed in 2005 (the most recent survey) by ORC Worldwide, the compensation and human resources specialists, had a tax equalisation programme in place. All were designed to be tax-neutral, so that employees’ tax burden was no more and no less overseas than it would have been had they stayed at home.