Tax News & Views International Weekly: Remote Work Headaches

In the past, the term “dual resident taxpayer” may have brought to mind a glamorous, worldly jetsetter—a global tycoon, or maybe James Bond.

In the post-COVID era, however, it’s an increasingly common situation for workers. There have always been those whose job involves traveling to different jurisdictions, for short or long periods of time. And, especially since the formation of the European Union, many commute across national lines on a daily basis. But in the age of remote work, workers can easily split their time in different countries, or move frequently without disrupting their employment.

And, these remote workers could be important or high-ranking employees for the firm—maybe even the CEO.

This dynamic is increasingly causing tax headaches for both the employees themselves and their companies, according to comments submitted to the Organization for Economic Cooperation and Development’s for their recent consultation request on the “Global Mobility of Individuals.”

Several taxpayer organizations and accounting firms said that, despite a recent OECD effort to update its model treaty on the issue, more work needed to be done on consistent international standards to make it clear where workers reside for tax purposes. The organization released the comments on Jan. 14.

There are two sets of tax problems that global mobility can raise. It can lead to questions for mobile workers, including how to resolve disputes between two jurisdictions both claiming their taxable income. And businesses can find themselves taxed in jurisdictions where they aren’t otherwise present, if remote work can qualify as a permanent establishment, or a taxable nexus.

For the employees, countries have different thresholds to trigger when an individual is considered a tax residence, the commenters said. While the OECD guidelines recommend that residency be triggered after an individual lives in a jurisdiction for 183 days, many countries’ rules allow for a much lower threshold—as short as 16 days in the United Kingdom, according to RSM’s submission. They also look at other factors that can vary depending on local laws and customs, such as family or economic ties.

“The subjective nature of these tests often results in indeterminate or uncertain answers creating friction and risk for organizations who wish to be compliant with their reporting and withholding obligations,” PwC wrote in its submission.

Relief for double taxation may be available through a treaty, but that can be difficult or burdensome to obtain, many of the commenters said.

The OECD also held a video consultation on Jan. 20, and officials from the organization said they are considering next steps.

Have more questions about tax compliance and remote work? Check out our Global Mobility Services.

Noteworthy Items This Week

U.N. Tax Convention Will Not Override Treaties, Chair Says – Sarah Paez, Tax Notes ($):

Several seminar participants pointed out that the language in the draft could violate the Vienna Convention on the Law of Treaties (1969) — particularly article 30, paragraph 3. That section states, “When all parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation under article 59, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty.”

Youssef responded directly to the criticism, saying that renegotiating existing tax agreements that are inconsistent with article 5 is a condition for committing to the tax convention. He added that the convention is trying to say, “If you commit to this [convention], you cannot violate it in any of your existing [or] future tax treaties.”

Companies Reveal Big Mystery: Where They Pay Taxes and How Much – Mark Maurer and Richard Rubin, The Wall Street Journal ($):

New requirements set by the Financial Accounting Standards Board in 2023 recently took effect. In annual financial reports, companies now must break out income taxes paid to authorities at the federal, state and foreign levels. Because most companies report earnings on a calendar-year basis, a wave of these disclosures will arrive over the next month for 2025. Private companies don’t have to comply for another year, though any company can adopt the requirements early.

Investors and nonprofit groups sought the new disclosures to boost transparency. Many companies, meanwhile, argued that additional information would put them at a competitive disadvantage by exposing tax strategies.

“A lot of the value here is going to be the questions that this information provokes,” said Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a progressive group that criticizes corporate tax avoidance.

Trump's Greenland Tariff Threats Could Backfire On US – Josh White, Law360 Tax Authority ($):

European leaders don't see the U.S. as a dependable ally following the Greenland dispute, experts told Law360. This is despite the Trump administration dropping its tariff threats against several member states of the European Union, as well as the U.K., in its bid to acquire Greenland.

The EU has so far stalled on responding with its strongest countermeasures, postponing the use of such tools against the U.S. twice. But the chances of retaliation may be increasing over time, said Laura Seelkopf, professor of international comparative public policy at Ludwig Maximilian University of Munich.

"The likelihood that the EU will take it without reciprocating again seems to be getting lower by the day," Seelkopf told Law360.f you compare the new simplified effective tax rate safe harbor with the transitional CbCR one, it really strikes out that it’s not that simple,” Stephen Brunner, international tax partner at global accounting firm BDO, said.

Global Tax Deal Sparks Fear US Law Will Be Tougher to Change – Lauren Vella, Bloomberg Tax ($):

Multinationals and international tax observers are concerned that legislative changes in the US—like lowering the corporate tax rate to 15%, for example—would put the US’s exempt status on shaky ground, potentially subjecting American companies to the global minimum tax.

“I got that question within probably two hours of this agreement being released, and I’ve probably gotten it about a half a dozen times this week from companies really concerned that this is somehow locking the United States in to features of the tax system that a lot of taxpayers would like to see change,” said Pat Brown, a co-leader at PwC’s Washington National Tax Services practice.

Businesses would, for example, “like to see some relief” under CAMT, or “maybe even repeal of the CAMT,” he said, referring to the US’s corporate alternative minimum tax. The levy, enacted in 2022, is meant to ensure that highly profitable companies, like Amazon.com Inc., pay at least 15% tax based on their financial statement income.

Several Indirect Tax and Digital Trade Trends Will Shape 2026 – Aleksandra Bal, Bloomberg Tax:

Digital trade keeps growing, and so does the pressure on governments to update their tax rules. Alignment is now a key theme.

Countries want their tax systems to reflect how people consume digital services today, not how they did a decade ago. That means taxing access to remote software and ensuring foreign sellers are treated the same as domestic ones.

For businesses, the changes bring new responsibilities. Foreign registration will become more common. Cloud services will face more consistent taxation. And platforms will continue to play a larger role in collecting tax at the point of sale.

Public Domain Superhero of the Week

Every week, a new character from the Golden Age of Comics, who’s fallen out of use.

This week’s entry: The Black Orchid

Debut Year:1944

Debut Publication: Top Comics

Origin Story: The district attorney's secretary at night solves crimes as a mysterious masked figure.

Superpowers: Aside from her sleuthing skills and moxie, she has a ring that dispenses knock-out gas.

Eide Bailly's International Tax Team and our affiliates at HLB, The Global Advisory and Accounting Network, stand ready to assist with your worldwide tax needs.

Tax News & Views International Weekly: Remote Work Headaches

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Alex Parker