The Organisation for Economic Co-operation and Development (OECD) has released updated guidance clarifying when remote or cross‑border work may create a permanent establishment (PE) for employers, an issue that has become increasingly complex as flexible work arrangements expand. The guidance introduces two key assessments—the 50 per cent Working Time Test and the Commercial Reason Test—to determine whether an employee’s home office or other remote location constitutes a fixed place of business for tax purposes. The OECD emphasizes that PE risk depends on permanence, the proportion of time spent working in a location, and whether there is a genuine business rationale for the arrangement. Employers are encouraged to closely monitor remote work patterns, understand the commercial drivers behind them, and proactively assess potential tax exposure, as failing to identify PE risks can lead to unexpected filings and compliance obligations.
Originally Published by Crowe Soberman LLP on 12 March 2026
Originally Published by Crowe Soberman LLP on 12 March 2026
