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This excerpt taken from the C 10-Q filed Aug 7, 2009. HYPOTHETICAL TAX WITHHOLDING AND HYPOTHETICAL HOUSING CHARGES
· Actual and Hypothetical Taxes
Citigroup will pay all income taxes to all taxing jurisdictions on total Citigroup compensation paid during your expatriate assignment. During this same period, Citigroup will deduct hypothetical taxes from your expatriate salary each month. You are also responsible for hypothetical tax on any Citigroup equity income during your assignment (e.g., stock option exercise gains and the value of stock awards at vesting). Hypothetical taxes, calculated on your Citigroup compensation, are based on United States income tax. You will be responsible for all actual taxes due on any non-Citigroup income, but you may be entitled to claim a limited right to tax protection for such income, as more fully explained in the applicable Expatriate Handbook.
The benefits described in the Expatriate Handbook and summarized elsewhere herein, for which you may be eligible as a participant in the expatriate program, including the tax equalization policy, will at all times be subject to the terms of the expatriate program then in effect. These benefits are broadly designed to limit as far as reasonably possible your out-of-pocket costs for certain living expenses, including income taxes, to what you would have paid had you been an employee under local terms and conditions in your compensation country. To ensure the fair and equitable administration of these policies, you agree to assume the following responsibilities:
· Payment of Tax Obligations to Citigroup
You agree to pay Citigroup any outstanding hypothetical taxes within 30 days of the date of your final tax reconciliation statement for the year (the “Due Date”). Payments not received by the Due Date will be subject to additional interest charges and penalties.
· Filing Tax Returns
You agree to cooperate with PwC in preparing any required income tax returns including providing PwC with any required information in a timely manner and ensuring that it is complete and accurate in all material respects. You will be liable for any charges, penalties and interest assessed by the taxing authorities as a result of any untimely or inaccurate submissions.
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· Notice and Right of Offset
If you cannot meet any of these tax related obligations within the time provided, you agree to notify Citigroup in writing as soon as reasonably practicable, fully describing the reasons for your non-compliance. Depending on the circumstances, Citigroup may, at its discretion, offer you an adjusted payment schedule (but shall be under no obligation to do so). However, if any amounts due hereunder remain unpaid for 120 days after the Due Date and a re-payment schedule has not been agreed to by you and Citigroup in writing, you hereby consent to the deduction of any such sums owing by you to Citigroup from your salary, any allowances, reimbursements or any other payment or payments due to you from Citigroup or any associated company. You hereby also agree to make immediate payment of any such sums owed by you to Citigroup or any associated company upon demand.
· Hypothetical Housing Charges
Citigroup will deduct a hypothetical housing cost from your expatriate pay each month. Hypothetical housing costs represent an independent estimate of the average expense of housing in New York for a person at your salary level and family size. This deduction can change when there is a change in your base salary and also annually based upon survey data provided by an independent consultant. You agree to this deduction from your pay and acknowledge that it may be less than or may exceed the housing allowance described below, based on housing costs in your assignment location relative to average housing costs in New York.
This excerpt taken from the C 10-Q filed May 11, 2009. HYPOTHETICAL TAX WITHHOLDING AND HYPOTHETICAL HOUSING CHARGES
· Actual and Hypothetical Taxes
Citigroup will pay all income taxes to all taxing jurisdictions on total Citigroup compensation paid during your expatriate assignment. During this same period, Citigroup will deduct hypothetical taxes from your expatriate salary each month. You are also responsible for hypothetical tax on any Citigroup equity income during your assignment (e.g., stock option exercise gains and the value of stock awards at vesting). Hypothetical taxes, calculated on your Citigroup compensation, are based on United States income tax. You will be responsible for all actual taxes due on any non-Citigroup income, but you may be entitled to claim a limited right to tax protection for such income, as more fully explained in the applicable Expatriate Handbook.
The benefits described in the Expatriate Handbook and summarized elsewhere herein, for which you may be eligible as a participant in the expatriate program, including the tax equalization policy, will at all times be subject to the terms of the expatriate program then in effect. These benefits are broadly designed to limit as far as reasonably possible your out-of-pocket costs for certain living expenses, including income taxes, to what you would have paid had you been an employee under local terms and conditions in your compensation country. To ensure the fair and equitable administration of these policies, you agree to assume the following responsibilities:
· Payment of Tax Obligations to Citigroup
You agree to pay Citigroup any outstanding hypothetical taxes within 30 days of the date of your final tax reconciliation statement for the year (the “Due Date”). Payments not received by the Due Date will be subject to additional interest charges and penalties.
· Filing Tax Returns
You agree to cooperate with PwC in preparing any required income tax returns including providing PwC with any required information in a timely manner and ensuring that it is complete and accurate in all material respects. You will be liable for any charges, penalties and interest assessed by the taxing authorities as a result of any untimely or inaccurate submissions.
3
· Notice and Right of Offset
If you cannot meet any of these tax related obligations within the time provided, you agree to notify Citigroup in writing as soon as reasonably practicable, fully describing the reasons for your non-compliance. Depending on the circumstances, Citigroup may, at its discretion, offer you an adjusted payment schedule (but shall be under no obligation to do so). However, if any amounts due hereunder remain unpaid for 120 days after the Due Date and a re-payment schedule has not been agreed to by you and Citigroup in writing, you hereby consent to the deduction of any such sums owing by you to Citigroup from your salary, any allowances, reimbursements or any other payment or payments due to you from Citigroup or any associated company. You hereby also agree to make immediate payment of any such sums owed by you to Citigroup or any associated company upon demand.
· Hypothetical Housing Charges
Citigroup will deduct a hypothetical housing cost from your expatriate pay each month. Hypothetical housing costs represent an independent estimate of the average expense of housing in New York for a person at your salary level and family size. This deduction can change when there is a change in your base salary and also annually based upon survey data provided by an independent consultant. You agree to this deduction from your pay and acknowledge that it may be less than or may exceed the housing allowance described below, based on housing costs in your assignment location relative to average housing costs in New York.
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