On June 2, 2020, Friedemann Thomma, Becca Chappell, Molly Schneider, and Misha Goodwin published “Taxable Presence for Businesses with a New Remote Workforce” in Bloomberg Law. The following is an excerpt:
The Organization for Economic Cooperation and Development (OECD) issued guidance on April 3, 2020, suggesting that employees temporarily working outside of their employer’s home country of operation due to Covid-19 related travel restrictions or shelter in place orders are not likely to trigger new income tax obligations or establish tax residency in new countries under global taxation treaties. This clarification is good news for companies concerned that involuntarily remote work arrangements could give rise to additional foreign tax obligations. However, as governments gradually ease travel restrictions, employers should take steps to limit their international tax exposure in light of any cross-border telework and mobile workforce practices that they retain as a permanent part of their business model.
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