Many MNs will tax protect or tax equalize the executive. Tax protection involves reimbursing the executive for any increased tax burden the executive faces due to working abroad. If, however, working abroad reduces the executive s tax burden, a company providing tax protection does not recover the executive's tax savings. Tax equalization works both ways. The company reimburses any increase in tax burden, but also recovers any decrease in tax burden.
Tax equalization is more prevalent than tax protection.