Employees could establish tax residency in a new jurisdiction because of a remote working request. Has the employer informed the employee of the potential implications? Is the employer aware of their potential obligation to withhold tax?
INCOME TAX
Similarly, an employee change of jurisdiction could impact social security arrangements and where not only employee, but employer contributions will be due. Are employment costs going to be increased given differences in rates of employer social security contributions?
SOCIAL SECURITY
PAYROLL REQUIREMENTS
Where an employee movement triggers a liability it is necessary to confirm employer obligations, in the jurisdiction. So is the employer obliged to set up a payroll in the new jurisdiction – for example to handle withholding and social security liabilities? Or is an employee tax return submission sufficient?
ADDITIONAL COMPLIANCE OBLIGATIONS
It is incumbent for employers to understand their full obligations in another jurisdiction. In certain situations, employers can be considered to commit a criminal offence if they have not taken reasonable steps to ensure that overseas tax liabilities are met.
OTHER TAX AND NON-TAX MATTERS
Other corporate tax and non-tax issues may impact a decision to permit a remote working request. We look at these in more depth in Working from anywhere: Employer Corporate Tax and in Working from anywhere: Non-Tax Issues
