It is undeniable that in the current modern era of technological advancement, in a world of booming more innovative information technologies, there is a steadily increasing proportion of employees who can perform their work from anywhere in the world, and hence “remotely,” without any physical presence at the employer’s workplace. On the other hand, in the globally interconnected business environment, the relocation or assignment of key experts to other countries continues to have a significant percentage representation.

In this way, corporate companies benefit from and use the in-house know-how of their employees, who are seconded or hired to other companies established in different countries, in order to share knowledge, internal experiences, expertise, management skills, and mutual assistance. As a result of such reallocation, the companies are able to successfully expand their business portfolio in multiple markets.

This gives rise to a number of legislative obligations that must be monitored and complied with, whether on the side of the employer or the employee, with potential sanctions for non-compliance.

Key areas within global mobility include:

• Income tax on the employer’s side as well as the employee’s side
• Employment law
• Payroll processing (or the so-called shadow payroll)
• Health insurance system
• Membership of the social security system of a particular country
• Immigration policy regarding visas and permits for residence/employment
• International aspects related to the taxation of employee income

Within the aforementioned key areas, questions such as following may arise:

• How to determine the tax residency of the seconded employee?
• In which country does the obligation to pay tax or tax advances arise?
• Is there a potential risk of an emergence of a permanent establishment?
• Is an A1 certificate required in connection with the secondment of an employee?
• What are the working conditions in the host country?
• Where is the employee´s place of work?
• Is the employee entitled to travel allowances and are they tax-free?
• How to deal with the net income guarantee or tax equalization?

As a member of the international consulting network CLA Global, our experts can provide you with the necessary support on an international scale for a wide range of your global mobility activities. We will be happy to help you navigate trough the tangle of obligations that need to be complied with, whether in terms of local regulations or from a global perspective.