OECD Adapts To Remote Work Economy

On November 19, 2025, the Organization for Economic Co-operation and Development ("OECD") released an update to the OECD Model Tax Convention on Income and on Capital (the "2025 Update").

Among the changes are important clarifications to the Commentary on Article 5, dealing with the meaning of Permanent Establishment ("PE") – and more specifically directed at helping determine when an individual's home office may constitute a PE of the enterprise engaging the worker.

In a world increasingly shaped by remote work, changes like these are timely and likely only the beginning of further developments – and tax audits!

2025 OECD Update: Remote Workers & Home Offices

The 2025 Update clarifies when an individual's home may be treated as a PE of the business engaging the worker – including employees AND certain contractors or agents acting on behalf of the business (but not independent agents carrying on their own business). While each case will be assessed on its own facts, the revised