I was reading an article about employees who are keeping up the facade of wfh when they’ve actually moved abroad to a place where the cost of living is cheap e.g Thailand. They align their work hours, meet targets, in fact no one would be any wiser.
The article went on to mention that it’s a nightmare for companies because of the tax implications. Can someone what the actual problem is. Thanks!
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Most countries have laws that provide that if a company operates or does business in that country, the company becomes subject to the laws of that country.
One of the signs of doing business in a country can be having an employee working in that country, so if their employee moves to another country and sets themselves up to do their job from there, the company might then become subject to the laws of that country.
That might mean that the company has to pay tax in that country on their profits, withhold income tax in that country on the salary they pay their employee and pay it to that country’s tax office, pay pension contributions for the employee, comply with the laws of that country about minimum pay and leave (holidays, sick leave) for the employee, and work safety laws, all in a country they didn’t want to operate in in the first place (and potentially didn’t even know they were operating in). Which is absolutely a bit of a nightmare for the company.
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