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ARTICLE · 01 JULY 2026

Permanent Establishments Series #1: Remote & Hybrid Working – New York Office Snippet

Loyens & Loeff
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As remote work becomes standard practice for US multinational enterprises with European employees, the question of whether home offices can trigger permanent establishment obligations has evolved from a theoretical concern to a pressing compliance issue. The OECD's November 2025 guidance introduces a 50% working-time threshold and commercial reason test that fundamentally reshapes how companies must evaluate cross-border tax exposure. Understanding these new parameters is essential for US businesses operati

NetherlandsTax
Michiel Schul
Michiel Schul
Jan-Willem Kunen
Jan-Willem Kunen
Laurens Hoek
Laurens Hoek

Loyens & Loeff NY regularly posts ‘Snippets’ on a range of EU tax and legal topics. This is the first Snippet in a series on permanent establishment (PE) risks for U.S. multinationals (US MNEs) in Europe. This Snippet focuses on remote working and home office arrangements.

For US MNEs with employees in Europe, a key question is whether an employee’s home office could create a PE for the US-based employer. Historically, companies were primarily concerned about PE risks when setting up physical offices, warehouses, or agents abroad. Now that flexible work has become widespread, with many modern US businesses, from tech startups to consulting firms, operating fully remote teams, the analysis has fundamentally changed.

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