We’ve talked quite a bit about how individuals, such as digital nomads and regional managers, need to track their days in countries,
so as not to become liable for tax. We’ve talked less about the liability for companies.
But suddenly the subject of allowing employees to work from anywhere seems to be everywhere in travel news. As a recent
article
in Business Travel News Europe pointed out, employers such as Shopify and Wise already allow staff to work for 90 days away from home,
and Airbnb has recently announced the same.
The justification for this is simple: companies want to attract, and then retain, their best people. We agree that working from anywhere
is a powerful attractor to people whose living situation permits it.
However, the administrative overhead for permitting people to work from anywhere is formidable. It involves human resources, finance, payroll,
tax, legal, and visa and immigration specialists.
On the tax side alone, the possibility of companies being judged to have a “permanent establishment” in the countries in which their people are
working is very real. This could make the company liable for tax.
One of the key ways to eliminate the appearance of a permanent establishment is to track the days all your employees combined spend in all countries,
and stay below the thresholds set by your tax advisor.
Mia Bazo’s Tax Compliance tool does that, of course. The administrator can call up a single view of all staff, all countries. If you’re considering
letting staff work from anywhere, give us a shout.
John Scott is founder and CEO of Mia Bazo and our sister company Voyage Manager, with 24 years in software design and development. He is a digital nomad and committed environmentalist.