Remote work is no longer a temporary solution or an HR perk, it has become a structural feature of modern business, and it’s more and more common for that work to be done in a different country, often without fully considering the tax and legal consequences.
What many executives still underestimate is this: a single employee working remotely from another country can be enough to create a permanent establishment with significant corporate tax, compliance, and audit exposure.
When remote work crosses the line into permanent establishment (PE)
Under most tax treaties and domestic tax laws, a PE arises when a foreign company has a fixed place of business or a dependent agent in another country. Remote work challenges both concepts.
