This excerpt taken from the GSK 20-F filed Feb 29, 2008.
GSK currently offers employees of particular grades eligibility to participate in the following Long Term Incentive Plans (LTIPs):
Each has a different set of Plan rules which, in turn, may be treated differently across the country tax jurisdictions in which eligible employees work.
When an eligible employee transfers to a country to work outside of his/her home country, he/she may be subject to taxation in the host country. He/she may still be subject to taxation in the home country or, additionally, subject to taxation in another country in which he/she has worked during the life span of the LTIP.
As a result of multiple tax jurisdictions an employee may have a tax burden which is greater or lower than it would have been had he/she continued to work in the home country.
Because of this potential inequity, GSK has developed a tax equalisation/protection policy (Tax Policy).