The COVID-19 outbreak has led many countries to implement border controls as a temporary measure to curb infections, and many employers find their employees working from home or in locations outside the jurisdictions where employers typically operate or are located. International travel restrictions affect Boards of Directors and employees of multinational enterprises, alike, who find themselves marooned in various different locations around the world. Those unexpected remote employment and business activities may trigger a local tax presence for which the employer has not planned. This will in turn give rise to international tax complications, including increased permanent establishment (PE) risks and in some circumstances, a change in corporate tax residency.

This article, part of Baker McKenzie and Bloomberg Tax's Special Report, discusses the issues arising from these remote business and employment activities as well as the risks that such remote activities could cause if they continue after the COVID-19 crisis is resolved (where personnel continue to desire or demand to work remotely). There are individual tax implications for employees working remotely abroad that are not discussed in this article but are worth considering together with the tax implications for corporations.

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