OECD updates Model Tax Convention to reflect rise of cross-border remote work and clarify taxatio…

Explore the latest developments concerning OECD updates Model.

OECD updates guidance on tax treatment of remote working

The OECD has updated its model double tax convention (the Model Treaty), and in doing so, has amended its guidance on when a home office of a team member can generate a taxable presence of the foreign business for which they work. Businesses with remote workers will want to ascertain whether the relevant tax authorities will change their practices in line with the new guidance and, if so, confirm that their policies on remote working remain appropriate.

Most countries will look to tax non-residents who have a threshold level of presence in their territory, referred to as a "permanent establishment" (PE), on the profits of that establishment. Many countries define PE in line with the OECD's approach, as set in the Model Treaty. Broadly, this provides for two types of PE (i) a fixed place of business (such as an office), and (ii) a dependent agent that has sufficient authority over the business of the non-resident.

The dynamic landscape of current events often brings forth significant discussions. Monitoring these developments provides crucial insights.

For more detailed information, explore updates concerning OECD updates Model.

For more news…