The Redefined Global Workplace’s Tax Evolution

In this month’s issue of Mobility magazine, we look at how mobility professionals are navigating tax policies for the redefined global workplace.

Technology in the remote environment has singlehandedly allowed millions of people to not just work from home, but work anywhere. With this comes additional tax considerations for the distributed workforce. In this month’s issue of Mobility magazine, “The Tax Evolution” feature looks at the new norm of nontraditional work situations, and how mobility professionals are paying close attention to the impact of tax policies and the redefined global workplace.

First, the reality of remote work is unlikely to completely disappear. “Post-pandemic, the percentage of remote workers may decrease, but it will likely still be a large portion of the workforce,” says David Livitt, director and national practice leader for Global Tax Network. “Companies will have to take into consideration if they allow remote work on a permanent or temporary basis, if they will allow employees to truly work from anywhere, and what virtual assignments might look like for business.”

Corporate policymaking will have much to consider and remote work strategy should, at the very least, address immigration and travel regulations; regulatory risk for each jurisdiction where workers are situated; corporate tax and transfer pricing; and workforce and talent management, including benefits and expenditures to allow employees to work from home with ease. For taxes especially, understanding the regulatory risk of each jurisdiction of individual employees will go a long way in ensuring company compliance.

This goes for employees working in different states, but also different countries, an added complexity that mobility professionals are tasked with. While some countries are looking at “dependent personal services” clauses of their tax treaties that give some business travelers a grace period before their presence merits taxation, others are adopting the Organization for Economic Cooperation and Development’s “economic employer model.” This allows taxing authorities to consider business travelers, even those staying fewer than the traditional 183 days, as employees of the company in the host country, not the company in the home country.

Compliance may mean less regulatory issues, but it can also boost an employer’s prospect for needed talent. “[Companies] need to make sure that wherever the employees are, they have control of compliance. If that is considered and aligned properly, that can be a very positive aspect for diversification of talent. Companies can compete in different markets and optimize salaries and cost and efficiency,” says Jordi Roca of GD Global Mobility. From the need for skilled talent to avoiding regulatory hiccups due to the distributed workforce, there is much for employers and mobility professionals to consider around tax compliance.

To learn more about tax compliance in the new reality of remote work, head over to this month’s issue of Mobility magazine. While you’re there, dive into features on emerging immigration trends and the related compliance issues; duty of care considerations before and after the pandemic; how to achieve a meaningful mobility experience for the employee and their partner, and much more. Check it out!

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