International teleworking: more than just commuting

Having already overcome the situations caused by the pandemic, companies are now facing an unexpected legacy such as international teleworking for employees.. Requests from employees to telework outside the countries where their companies or workplaces are located have increased significantly, affecting most business sectors, although it is true that some such as technology, telecommunications, etc.. are being especially involved.

In addition, to this new situation it is necessary to add the shortage of talent at a global level, which increases the need for certain companies to adopt urgent measures regarding international teleworking in order not to be deprived of this talent that is so necessary for the development of their activity. Therefore, in many cases, companies accept the requests of the famous digital nomads profiles with the aim of teleworking from anywhere in the world, unaware of the consequences, both individual and corporate, that this decision may derive from..

In parallel, the institutions seem to be reacting to this dynamic and seek to attract these digital nomad profiles with certain facilities and flexibility in immigration procedures or even tax advantages that end up convincing them to settle in their countries.. As an example, we have the recent approval in Spain of the startup law, which, among other novelties, includes the telework visa and the possibility of opting for the special tax regime, known as the Beckham law, for teleworkers who settle in Spain.

In order for a company to bet on international teleworking to be successful, it is necessary that, in the first place, the possible implications that this situation entails be analyzed.. This analysis must include aspects such as the tax, immigration, labor and Social Security regime and, in addition, it is highly recommended that it be carried out in advance of the displacement, since there are many situations in which the area to which the employee belongs has allowed a displacement to telework from another country without having the approval of their respective HR department, thus complicating regularization.

In the tax sphere, moving for a long period (for example, two years), or even indefinitely, to another country will entail in most cases the loss of tax residence in origin and the acquisition of the Tax residence at destination for the international teleworker. This implies two points to take into account:

• In the first place, the employee must be aware that the country of destination may require payment of its taxes and must therefore register for tax purposes and become familiar with the corresponding tax system.
• Secondly, the company must be aware of the corporate impact generated by having said worker there (for example, if this displacement could imply the existence of a Permanent Establishment at the destination, with important tax implications, or if it must assume the obligation to register in order to make the corresponding withholdings for salaries paid from Spain). Likewise, it is worth noting that it will be necessary to review the regulations applicable in each country, since some territories have stricter regulations than others and, through the obligations imposed on the companies of origin, they seek to guarantee effective taxation of the employee.

At the Social Security level, it is also relevant to review the alternatives or obligations that exist in each case.. In this sense, it is true that at an international level we have applicable regulations, as is the case of Community Regulation 883/2004 and the bilateral agreements signed between Spain and different countries that allow the person to move through the employer to provide their services temporary to another country, continue contributing in the country of origin, although these regulations have become obsolete and do not contemplate forms of international teleworking, making it difficult to find accommodation in them to cover international teleworking situations that exist today.

Having said the above, it is essential to consider whether the employer must register in the Social Security system of the country of destination and make contributions in it due to the fact that they have agreed to allow their employee to work there permanently..

Last, but not least, is the migratory plane. This aspect would affect the employee who travels to the corresponding country, since he must be aware that visiting the country for a couple of weeks of vacation is not the same as establishing himself permanently in the country of destination and working from there, since this It implies having the mandatory residence and work permits in each place. For the company, although it could be thought that it cannot and should not intervene in this process, it is no less true that there is always a reputational risk in the event that the employee is detected by the destination authorities and identifies himself as a company worker..

In conclusion, the idyllic possibility of teleworking from a paradisiacal beach with the authorization of the company is necessarily accompanied by implications for both parties, the company and the international teleworker, which must undoubtedly be known and accepted before giving the green light to these new situations. more and more frequent, currently being a new reality between companies and employees that, for now, seems to have come to stay.

*Daniel Enriquez Aguado. Senior manager. PeopleServices. KPMG Lawyers.