Media type · Fixed place or dependent agent
Permanent establishment
A taxable presence that a business can create in another country.
Key facts
| Arises from | Fixed place or dependent agent |
|---|---|
| Defined by | Domestic law and treaties |
| Risk | Local tax on business profits |
Remote work can contribute to the facts
A person working from a country for months can be part of the evidence that a business has a taxable presence there, especially if they conclude contracts or hold authority. The question is factual and depends on the treaty.
The risk is not limited to the individual tax return. It can attach to the business and to profits attributed to the presence, which is why companies often set internal limits on where staff may work.
Frequently asked questions
Does one remote employee create a permanent establishment?
Not automatically, and the answer depends on the treaty and on what the person does. It is a facts-and-circumstances question.
Who is exposed if one exists?
The business can face local tax and filing obligations on profits attributed to the presence. The individual position is separate.