The AUKUS partnership between Australia, the UK, and the United States is reshaping defense and technology collaboration in the Indo-Pacific region. The trilateral alliance is driving closer cooperation on defense capabilities, innovation infrastructure, and integrated talent development.
As workforce mobility becomes central to its success, employers must move beyond securing appropriate clearances and proactively address immigration, tax, employment, and compliance complexities to support cross-border talent deployment.
Drawing from Vialto’s extensive experience, it is evident that companies in this sector encounter distinct challenges related to employee mobility. The sensitive nature of their work, coupled with the specialized skills and clearances required, creates a complex landscape. Additionally, stringent data security protocols and the often operationally decentralized global organizational structures further complicate matters. To navigate these challenges effectively, employers must go beyond merely securing the necessary clearances. They need to proactively manage a spectrum of mobility, tax, and legal risks to facilitate the efficient movement of talent across borders, all while avoiding unintended consequences for both the organization and its employees.
Immigration requirements
Effectively navigating immigration requirements is essential to ensuring seamless operations within organizations—both when deploying employees overseas and when bringing international talent into Australia.
Australia, the United States and the UK all have highly regulated immigration systems. Non-compliance with immigration requirements in these countries can lead to serious legal, financial, and operational consequences for employers and their employees. In Australia, key compliance measures recently introduced include increased civil liability penalties of AUD 66,000 for each offense, increased criminal penalties of AUD 99,000 or a maximum of two years in prison for each offense, or both, and new powers for the Minister of Home Affairs to declare an individual or organization a “prohibited employer”1.
In the United States, missing I-9 forms, failure to maintain requisite documentation such as Public Access Files for H-1B workers, misuse of visitor visas for productive work, or failure to extend an employee’s work permit in a timely manner can lead to penalties2. In the UK, penalties have tripled for employers who are found to have employed a person illegally. Fines can now range from GBP 40,000 to GBP 60,000 per employee working without permission. The UK is going further by dramatically increasing the number of enforcement officers searching for non-compliance and potentially expanding the duty to check the right to work to contractors and the self-employed. New regulations have been introduced to target poor employment practices, including the employment of individuals without proper permissions, which can have a serious impact on the employer’s ability to sponsor migrant workers3.
Finally, the current geopolitical climate may influence visa processing times and requirements, so proactive planning and flexibility are essential.
Tax obligations
Both employers and employees must be aware of their tax obligations when employees are sent overseas or when international talent is brought into the country. This includes understanding the obligations around withholding taxes, social security, and other employer taxes, for example, Fringe Benefits Tax and Payroll Tax in Australia, or State taxes in the United States—noting that outcomes can vary from state to state.
There are significant differences in the employee and employer compliance requirements for business travelers, remote workers, assignees, and company directors, so strategic and operational requirements, as well as deployment type, need to be aligned, and the compliance implications considered accordingly.
There may also be remuneration items with unintended consequences—such as the tax treatment of Australian superannuation contributions overseas and the UK taxation of company cars—as well as tax planning opportunities where concessions or exemptions may be available. For example, the UK exemptions for accommodation and subsistence costs on moves lasting no longer than two years4.
Corporate tax considerations
Companies must consider their corporate tax obligations in the host country, particularly if they do not yet have a physical presence there. Understanding local tax laws and compliance requirements is crucial to avoid unexpected obligations and costs.
Employment arrangements
Employment arrangements will likely vary depending on the length of the move, the role to be performed, and the country the employee is going from or to. Key considerations include:
Payroll considerations
While employees may remain on their home country payroll, employers must be aware of host country reporting and withholding requirements. While employees may remain on their home country payroll, employers must be aware of host country reporting and withholding requirements. For example, in Australia, this includes Single Touch Reporting obligations, which require real-time reporting to both employees and the Australian Taxation Office, as well as recently introduced Payday Superannuation laws. These laws require superannuation guarantee contributions to reach employees’ superannuation funds within seven business days of each payday (effective July 1, 2026).
In the United States, employers must also report and withhold income at both the federal and state level.5
To effectively respond to the workforce demands driven by AUKUS, employers should take proactive steps to manage the complexities of international talent mobility. These include:
As AUKUS drives increased cross-border workforce mobility, defense organizations and adjacent industry sectors must adopt a proactive and coordinated approach to managing the associated employee and employer risks. With heightened government oversight and complex regulatory environments across Australia, the UK, and the United States, employers need to navigate immigration, tax, and employment compliance with precision. Supporting employees through well-structured mobility programs and anticipating legal and operational challenges will be critical to sustaining workforce readiness and meeting the demands of this trilateral partnership.
Authors
Penelope Harris, Partner, Australia, Vialto Partners
Cherie Wright, Partner, Australia, Vialto Partners
Tim Cooper, Senior Manager, Australia, Vialto Partners
Sources:
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