International Remote Working

Major risks – A Guide 2023

Digital communication through high-speed internet has allowed the widespread adoption of remote working policies. Millions of employees are now able to better balance their aspirations for both their professional and personal lives. 

Increasingly, employers face pressures for such policies to allow employees to cross borders. Employees may either work for significant periods of time from home or another location in a completely different country from the employer’s base, or they may be frontier workers, frequently crossing borders as they pursue a “hybrid” model from a home and office located in different countries. 

Once borders are crossed, legal, tax and other regulatory issues can pose significant operational headaches for employers managing compliance risks.  

Using this guide

This document provides a starting point for you to begin to navigate the challenges presented by remote working. It provides an easy-to-understand overview of the key risks by looking at two scenarios:

 

Scenario 1

An employee works remotely in another country (the “host” country) for 6 months or less.

The employee remains tax resident in the “home” country.

The employee spends less than 183 days in the “host” country to which the employee is assigned and/or to which the employer charges the employee’s remuneration costs.

Scenario 2

An employee works remotely in another country (the “host” country) for a period of more than 6 months.

The employee remains an employee of a corporate employer based and tax resident in the “home” country. 

The employee is tax resident there and spends more than 183 days in the “host” country.

Download our full country-specific compliance guides

Scenario 1

Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Limited or no action required. Monitor changes.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Limited or no action required. Monitor changes.

 

Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk. 
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Urgent action required. High compliance risk.
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Limited or no action required. Monitor changes.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Limited or no action required. Monitor changes.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Action required. Medium risk. 
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Action required. Medium risk. 
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. In the absence of a social security agreement, there is an exemption in the UK for the first 52 weeks (where certain conditions are met).
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Limited or no action required. Monitor changes.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no agreement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Urgent action required. High compliance risk. In Canada and the US, Federal and State withholding required even if the tax treaty applies at the federal level, may need to appoint a local agent to operate withholding taxes. 
Difference in tax treatment of employer contributions / share schemes
Action required. Medium risk. Withholding may need to be applied to employer contributions. 
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Action required. Medium risk. 
Data protection
Urgent action required. High compliance risk.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Urgent action required. High compliance risk.
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Action required. Medium risk.

Scenario 2

Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Limited or no action required. Monitor changes.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Limited or no action required. Monitor changes.

 

Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk. 
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Urgent action required. High compliance risk.
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Limited or no action required. Monitor changes.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Limited or no action required. Monitor changes.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Action required. Medium risk. 
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no arrangement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Not applicable.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Not applicable.
Social security
Not applicable.
Payroll registration & withholding requirements
Not applicable.
Difference in tax treatment of employer contributions / share schemes
Not applicable.
Permanent establishment / Corporation Tax
Not applicable.
Regulatory
Not applicable.
Data protection
Not applicable.
Immigration
Not applicable.
Employment Law
Action required. Medium risk. 
Dismissal protection
Action required. Medium risk. 
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk. 
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. In the absence of a social security agreement, there is an exemption in the UK for the first 52 weeks (where certain conditions are met).
Payroll registration & withholding requirements
Limited or no action required. Monitor changes.
Difference in tax treatment of employer contributions / share schemes
Limited or no action required. Monitor changes.
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Limited or no action required. Monitor changes.
Data protection
Limited or no action required. Monitor changes.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Action required. Medium risk.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Action required. Medium risk. 
Labor inspectorate control
Action required. Medium risk.
Health and safety
Action required. Medium risk.
Individual income tax
Action required. Medium risk. Employees may need to file an income tax return to claim treaty exemption.
Social security
Action required. Medium risk. Social security may become due if there is no agreement between the country of employment and the country of remote work.
Payroll registration & withholding requirements
Urgent action required. High compliance risk. In Canada and the US, Federal and State withholding required even if the tax treaty applies at the federal level, may need to appoint a local agent to operate withholding taxes. 
Difference in tax treatment of employer contributions / share schemes
Action required. Medium risk. Withholding may need to be applied to employer contributions. 
Permanent establishment / Corporation Tax
Limited or no action required. Monitor changes.
Regulatory
Action required. Medium risk. 
Data protection
Urgent action required. High compliance risk.
Immigration
Limited or no action required. Monitor changes.
Employment Law
Action required. Medium risk.
Dismissal protection
Limited or no action required. Monitor changes.
Discrimination protection
Action required. Medium risk.
Regulatory compliance (minimum wage, etc.)
Urgent action required. High compliance risk.
Labor inspectorate control
Limited or no action required. Monitor changes.
Health and safety
Action required. Medium risk.

Country-specific compliance guides

We have created comprehensive country-specific compliance guides to help you identify, understand and manage the risks and benefits of flexible remote work so that you can identify and mitigate potential risks or challenges wherever your employees are in the world.

Our country-specific International Remote Working guides cover all the multidisciplinary challenges you may come across when your employee is working remotely abroad:

• Notification
• Income Tax Liability
• Income Tax Filing
• Social Security Liability
• Tax and Social Security Withholding
• Creating a Permanent Establishment
• Share Plans and Pensions
• Data Protection
• Employment Protection
• Immigration
• Health and Safety

You can download the country guides relevant to your business’ circumstances by completing the form below.

How CELIA Alliance can help:

  • We offer a unique combination of integrated expertise including regulated Law and Tax services, People Consulting and Communications, both in the UK and internationally. We are happy to support you with all the issues relating to international remote working. Please get in touch to discuss how we can help your business.

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CELIA Alliance members are identified here. Members of the CELIA Alliance are each independent law firms and do not practice law jointly with any other member of the CELIA Alliance. “CELIA Alliance” and “CELIA” are not trading names. For more information about the CELIA Alliance click here.

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Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this newsletter. For further legal information click here.

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