In recent weeks, various countries have agreed on the taxation of cross-border workers during the COVID-19 outbreak period. This follows after OECD guidance was published analysing tax treaty implications concerning certain tax issues raised by the circumstances surrounding the COVID-19 outbreak, such as potential creation of a permanent establishment or change in the place of effective management on the basis of a cross-border employee carrying out duties remotely, as well as other issues concerning cross-border workers and changes in the residence status of workers.
Agreements have been concluded between Belgium and the Netherlands, the Netherlands and Germany and Germany and Belgium, with countries generally agreeing that days worked at home due to COVID-measures would count as days worked in the contracting state. Some agreements deal with more specific cases versus a general agreement. Further agreements are expected to be concluded in the coming weeks.
Ref. CFE’s Tax Top 5 – 18 May 2020