With remote and hybrid working becoming the new normal, a major concern for employers relates to the possible creation of a ‘permanent establishment’ in another jurisdiction. Based on a detailed consideration of all the facts, we can help determine whether the presence of employees amounts to a permanent establishment and how to manage the tax implications.
Employing people usually involves dealing with local tax requirements, including withholding tax and/or social security contributions, running a local payroll or complying with other national law obligations. We help companies navigate these both at home and abroad. We also help companies deal with local tax authorities in the case of a tax audit.
As employers face growing calls to allow employees to ‘work from anywhere’, they should also consider the possible tax consequences of inadvertently creating a permanent establishment in another country. But what counts as permanent establishment? Here we explain some of the rules, and provide comments from our experts in 10 countries.
Sylvie Dumortier is a tax partner in our Belgian firm and Chair of the Ius Laboris Tax Expert Group.Sylvie Dumortier
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