Paying two social security contributions is particularly costly for companies that offer “tax compensation” to their expatriate employees. A company that sends an employee to another country often guarantees that the use will not result in a reduction in the employee`s after-tax income. Therefore, employers who have tax equalization programs generally agree to pay both the employers` and workers` share of the host country`s social security taxes on behalf of their transferred employees. Double taxation may also apply to U.S. citizens and residents who work for foreign subsidiaries of U.S. companies. Penalties – A monthly surcharge of 1.5% applies to underpayments of taxes up to the additional amount of tax due and a penalty of up to 100% of the tax due is applied if the income tax debt is formally applied by the tax authorities. Most U.S. agreements remove the dual coverage of autonomy by assigning coverage to the worker`s country of residence. . . .