Micro-PEs and Global Mobility: Balancing Risk and Pragmatism

Companies are engaging talent internationally with a diversity of approaches, from operating on a fully-remote basis to allowing remote working. With a complex patchwork of rules across different countries, businesses need to balance the risks of having employees in multiple countries and the possibility of being subject to taxes in those countries. Start-ups, high-growth, and mid-sized businesses may disproportionately be impacted by the high costs of managing corporate taxes and employer tax compliance in new country locations where they may have limited employee headcount, quite possibly creating a “micro-permanent establishment” (micro-PE). While micro-PEs give rise to compliance obligations and potential ...