Elizabeth Stevens Addresses How Teleworking Could Effect Tax Policy at OECD International Tax Conference

Digitalization has led to significant changes in labor markets, with teleworking having expanded dramatically as a result of the pandemic and with new types of jobs that can be done anywhere increasing. Physical presence is a key determinant of corporate income tax nexus and taxing rights such as PE creation and company residence.  Physical presence also plays an important role in transfer pricing (e.g., income allocation, profit attribution if PE is created).  At the same time, tax incentives to attract so-called “digital nomads” are being introduced.  The OECD issued some interim guidance at the onset of the pandemic but is it time to take a deeper look at these issues? This panel will discuss the tax treaty, transfer pricing and other implications of this trend for businesses, individuals and tax policy and tax administration.