The OECD has recently clarified its interpretation of the rules on the creation of a permanent establishment in the context of cross-border home-office arrangements. The updated guidance provides a more consistent and practical framework for distinguishing ordinary work flexibility from situations that may trigger additional employer obligations.
 

Key findings:

• the extent of work performed from abroad is a decisive factor,

• a 50% threshold of working time over a 12-month period serves as an indicative benchmark,

• exceeding this threshold does not automatically result in a permanent establishment,

• the purpose and commercial rationale for performing the work abroad are critical, not merely the location itself,

• Slovakia has accepted the updated OECD guidance without reservation.
   

These clarifications give employers a stronger basis for setting internal policies, planning flexible working arrangements and managing tax obligations in an international environment.

A detailed explanation, practical examples and recommendations for employers are available in our tax newsletter, which you can download below. 👇🏼