For the German version, please read
here>>
For many companies, bonus payments are an important instrument
for employee retention and motivation. The tax treatment of
variable remuneration is particularly complex in the case of
cross-border employment relationships in which employees work both
in their home country and in another country.
In addition to the national provisions of local tax law, the
correct allocation of such payments is governed in particular by
bilateral double taxation agreements (DTAs). In practice, however,
this often results in qualification conflicts - which could lead to
double taxation or double non-taxation.
If an employee now works across borders as part of a posting,
the tax allocation of the income must be checked once the residence
under treaty law has been determined. Provisions in connection with
the allocation of tax on income from employment can be found in
Art. 15 OECD-MA.
