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Welcome

Before we start the tool, we need some basic information.
Name*
What's the name of your company or organization?
What's your role at the company?
Disclaimer*
This tool offers an initial insight into the situation and possible points of attention on the above-mentioned topics from a Belgian perspective. Even though it was built with great care, the feedback in the tool has been written in general terms and should be seen as containing broad statements only. The tool is also limited in time (last update: November 2023) and in scope (only teleworking from ‘home’ is envisaged).

Given the complexity of the matter, individual analysis of the concrete situation will each time be necessary. BDO is not responsible for the accuracy of the information provided or any consequences of its application.

BDO, its partners, employees and agents do not accept or assume any responsibility or duty of care in respect of any use of or reliance on this tool, and will deny any liability for any loss arising from any action taken or not taken or decision made by anyone in reliance on this tool or any part of it.

BDO has the experts to help you analyse the impact cross-border teleworking has on your company. Feel free to contact your usual BDO contact or, for comprehensive tax and legal advice, you can contact BDO at tax@bdo.be.

Individual tax

Do you monitor the presence of your employees in general?*
Is there an international component in the employment (i.e. living and/or (temporarily) working in different countries/(foreign) employer/special tax regime)?*
Does the employee work from home or from another location than the usual company location on a (semi-) permanent base?*
Not envisioned by this question are ‘business travel’-days (i.e. short trips or longer assignments) outside Belgium
Does the employee go on business travel (i.e. short trips or longer assignments) outside Belgium?*
Is the employee a tax resident of that country?*

Tax permanent establishment risks

Does the employee (tele home)work in another country than where the employer is located for more than 30 days during a period of 12 months?*
Does the employee have a commercial role?*
Does the employee negotiate (the material elements of) or sign contracts?*
Does the company have a permanent establishment in the countries where the employees are teleworking from home?*
Is the employees' home office (located in another country) at the employer's disposal with a certain degree of permanency/ is the use of the home office an essential condition of the labour contract/ is the home office used full-time or more than sporadic?*

Social and legal

Where is the employment situated ?*
Did parties choose applicable employment law?*
Did the employment contract start before 1/1/2021 and has since then continued unchanged?*
Does the employee temporarily (less than 24 consecutive months) work 100% abroad (in another country than his original place of work) within the EEA and Switzerland?*
Does the employee simultaneously work more than 50% in his state of residency within the EEA and Switzerland (in another country than the state than where the employer is located) ?*

Conclusion

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As a result of not monitoring the presence of your employees, your organisation can be impacted by several legislations and compliance obligations concerning topics like social security or individual and corporate taxation. If you want an overview of the attention points you should look out for, our BDO experts will gladly provide them for you.
Because there is no international component to your employment, you are at low risk of having a new cross-border tax/social security and legal liability due to continued international teleworking. However, it might still be interesting to have a more in-depth analysis of your current employment situation and verify whether your current situation complies with all the new rules. These rules handle the applicable social security and taxation together with compliance obligations as a result of this.
As (some of) your employees work from home or from another location than the usual company location, you should know that these teleworking days are treated as regular Belgian working days. Unless a specific COVID-19 agreement between Belgium and the neighbouring countries (as the normal working state) can be applied i.e. The Netherlands/France/Luxembourg/Germany. It’s also good to know that these agreements have a limited duration. We at BDO can help you verify or determine this.

As there are (possibly) employees of yours traveling for work, it is important to know that depending on the frequency, this could trigger tax residency in that country. In addition, the individual taxation of the income related to these business travel days should be further investigated. This may vary depending on the applicable (special) tax status and the bilateral double tax treaty concluded between the working state and the residence state and whether a specific COVID-19 agreement between Belgium and the neighboring countries (as the normal working state) can be applied for i.e. The Netherlands/France/Luxembourg/Germany (with a limited duration).

Just contact us if you would like some help with verifying or determining if this is applicable to your situation.

Knowing that you don’t have any employees travelling for business purposes, you’re at a rather low risk of having a cross-border tax liability. However, it might still be interesting to verify whether the current situation doesn’t lead to an unexpected impact on the applicable individual taxation and the compliance obligations resulting from this. We can help you find out if this is the case for your organisation.
Don’t forget that the teleworking days of your employees working abroad could trigger taxation and other compliance obligations in the country of residence where the telework is performed. Unless a specific COVID-19 agreement (with a limited duration) could be evoked. If you need some help in verifying/determining this, we will gladly help you out.
As you have an employee who teleworks from another country but is not a resident there, this teleworking could trigger tax residency in that country. It is important to know that as long as no tax residency of that country occurs, it should be further investigated whether these teleworking days are taxable in the working state. This is based on the double tax treaty concluded with the country where the individual is a tax resident. We can help you find out if this is the case for your organisation.
Because your employee is (tele)working more than 30 days during a period of 12 months in another country than where the employer is based, there’s a risk of having a permanent establishment/base in the country where the activity is performed. This could lead to an impact on the taxation of the employee’s and/or company’s income and on other compliance obligations both for the employee and the employer.
Because the employee has a commercial role, there’s a risk of having a permanent establishment/base in the country where the activity is performed. This could lead to an impact on the taxation of the employee’s and/or company’s income and on other compliance obligations both for the employee and the employer.
Because the employee can negotiate (the material elements of) or sign contracts, there’s a risk of having a permanent establishment/base in the country where the activity is performed. This could lead to an impact on the taxation of the employee’s and/or company’s income and on other compliance obligations both for the employee and the employer.
Because of the employee’s home office situation, there’s a risk of having a permanent establishment/base in the country where the activity is performed. This could lead to an impact on the taxation of the employee’s and/or company’s income and on other compliance obligations both for the employee and the employer.
Knowing that your company has a permanent establishment in the countries where the employees are teleworking from home, it should be investigated whether the salary costs of the employee should be borne/allocated to the permanent establishment in the working country. As this could have an impact on the taxation of the employee’s and/or company’s income and on other compliance obligations both for the employee and the employer.
As your employee only sporadically works from the home office (located in another country) which is not at the employer’s disposal, your risk profile of having a permanent establishment in another country is rather low. However, it might still be interesting to verify whether the current situation doesn’t lead to an unexpected impact on the applicable social security, taxation and compliance obligations resulting from this.
Unfortunately, employment situated outside the Outside EEA, Switzerland, or the UK is not covered by this tool. Possible bilateral social security agreements could apply and should be investigated.
Since the employment contract started before 1/1/2021 and has since then continued unchanged, the rules apply as before 2021 (EU rules).
Since the employment contract didn’t start before 1/1/2021 or has since then been changed:

  • in case of employment in the UK, the UK law will apply
  • in the case of employment in the EU, the applicable law will be according to EU rules
Because parties chose applicable employment law, chosen law is applicable. A choice of law made by the parties shall not result in depriving the employee of the protection afforded to him by the mandatory rules of the law of the country which would have been applicable in the absence of choice.

Parties did not choose applicable employment law. In this case, the agreement shall be governed:

  • by the law of the country in which or, failing that, from which the employee habitually carries out his work in the performance of the contract; or
  • if the applicable law cannot be determined on the basis of the preceding criterion, the law of the country in which the place of business through which the employee was engaged is situated;
  • if it appears from the circumstances as a whole that the contract is manifestly more closely connected with a country other than that indicated by the two preceding criteria, the law of that other country shall apply.

The local sanitary measures will have to be respected, and additional measures regarding data privacy may have to be taken.

You have an employee temporarily working 100% abroad in another country than his original place of work within the EEA and Switzerland. In this case, certain rules of the EU Regulation 883/2003 regarding the posting of workers may apply. The employee can remain under the social security system of the original state of employment (within certain conditions). Moreover, specific COVID-19 measures (with a limited duration) may result in the fact that the tele(home)working days are to be disregarded (i.e. these days may not be seen as days performed in another country than the usual country of employment). Do note that specific ‘no-impact’ rules were lifted as of July 1, 2023.
If your employee works more than 50% in his state of residency within the EEA and Switzerland, he is subject to the social security of the state of residence (in the EU Regulation 883/2003). Moreover, specific COVID-19 measures may result in the fact that the tele(home)working days are to be disregarded. Do note that specific ‘no-impact’ rules were lifted as of July 1, 2023.
As your employee doesn’t work more than 25% in his state of residency within the EEA and Switzerland, the applicable social security is to be determined on the basis of the simultaneous working principles set out in the EU Regulation 883/2003. While also taking into account the specific COVID-19 measures. E.g. if the employee is only working for one employer, the social security legislation of the country where the employer is located will be applicable. Do note that specific ‘no-impact’ rules were lifted as of July 1, 2023. Unless the employment is located outside the EEA or Switzerland, in that latter case, bilateral social security agreements should be further investigated.
As of July 1, 2023 (end of non-impact rules due to COVID-19), two options apply:
Option 1: Application of the general rules: The applicable social security can be determined based on the simultaneous working principles set out in the EU Regulation 883/2003. If the employee is working more than 25% of his working time in his country of residence, the social security legislation of the country of residence of the employee will be applicable.
Option 2: Framework Agreement: Another solution that needs to be investigated is whether the conditions of the specific Framework Agreement on the application of Article 16 (1) of Regulation (EC) No. 883/2004 in cases of habitual cross-border teleworking as determined in that Agreement are fulfilled. It’s the agreement concluded between the State of Residence and the State where the employer’s registered seat (or multiple employers in the same member state) is located, that should be consulted. This Framework Agreement, if applicable, allows employer and employee to deviate from the regular rules applicable in cross-border (tele)working situations and resulting in the explicit request to further apply the social security legislation of the member state of the registered seat of the employer. A specific procedure must be followed.
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