Workforce disruptions brought about by COVID-19 have challenged businesses to find ways to maintain their productivity, quality and timely products/services. Personnel may be stuck in foreign jurisdictions and have continued working there due to travel bans and/or quarantine requirements. Furthermore, many businesses have since considered the feasibility of putting in place permanent “work from anywhere” arrangements.

It is important to note that alternations of working arrangements may potentially trigger significant tax implications that businesses are not prepared for. On one hand, salaries derived by the staff may be exposed to taxes in the foreign jurisdiction(s). Moreover, the foreign jurisdiction(s) where the staff perform work may potentially result in the entity being treated as a resident or as having a permanent establishment in the jurisdiction(s) for tax purposes, giving rise to additional tax obligations and liabilities.

On a case-by-case basis, RillaWitt can help you assess the feasibility of your remote working policy. In respect of such arrangements, if you would like to learn more about the relevant tax implications and how exposures may be mitigated, please feel free to connect with us.