Cross-Border Remote Work and Permanent Establishment: Mitigating Risk for Multinational Employers

The Organisation for Economic Co-operation and Development (OECD) released its “2025 Update to the OECD Model Tax Convention on Income and on Capital” on November 19, 2025, marking the most substantial revisions since 2017. This article directly addresses the explosion of cross-border remote and hybrid work arrangements post-COVID-19, including employer concerns about when an employee’s home office or other remote location in a foreign country creates a taxable permanent establishment (PE) for their employer under Article 5 of the Model Tax Convention.