Tax and risk implications of a global workforce

What's the issue
Regulation & frameworks
Boardroom questions
Board actions

The rise of global and mobile workforces has become a cornerstone of modern business strategy. The widespread adoption of remote and hybrid work models has not only transformed employee expectations but also reshaped the way organizations operate. To attract and retain top talent, companies are reimagining their operating models to offer the flexibility today’s workforce demands. While the benefits of this evolution are clear, accelerated digitization has also led to more international employment situations, often creating complexities and risks that require careful oversight at the highest levels of leadership.

Some companies are using more homeworking as a recruitment tool, hiring staff or executives from abroad who continue to work partly from home. Others, however, may not even be aware when their employees are working from abroad. In any case, the company must know where their employees are working from to ensure compliance with local regimes on payroll, tax, immigration, labor law and social security, and compliance with sector-related regulations, such as in financial services, where sales and marketing may be restricted. The tax implications of long-term incentive programs, multi-country payroll reporting, withholding tax obligations, and employment tax relating to restructuring or M&A transactions must also be considered.

The board’s role is to weigh the benefits of workforce flexibility with the risks, ensure the company’s global/mobile working policy is in alignment with the company’s strategy and risk appetite, and to ensure there’s an appropriate process and policy in place

While there is no specific legislation pertaining to “working from anywhere”, there are the applicable double tax treaties, which are concluded between Belgium and the relevant country, and the EU social security regulation (Regulation (EC) for social security no 883/2004). More recently, the Framework Agreement on Cross-Border Telework has provided a solution for employees who regularly work from home for a foreign employer, reducing the scenarios where employers have to register for foreign social security. In addition, local regulatory environments each have their own rules and regulations, which might be applicable.

Do we have a policy in place for global/mobile working? Is this policy in line with our corporate goals?
How is compliance with this policy, and the associated risks, being monitored?
Do we have a comprehensive understanding of where our employees are and what activities they are performing?
Do we have any outstanding tax and local hosting country compliance issues, which may cause us problems in the future?
Do we have integrated tax, technology, immigration, and mobile administration services?
Do we have a global mobility service addressing short- and long-term business travel risks, payroll, and host country compliance?
Do we have processes in place to determine applicable social security regulations?
Do we provide guidance to employees on how remote work may affect their tax and social security and financial situation?
Are we keeping records of A1/CoC certificates, PWD notifications, or other mandatory compliance documentation?
Which countries, where we have expansion plans, are tightening their immigration policies, potentially causing delay in implementing our strategy?
Do we have business continuity plans in place if we need to repatriate people quickly?

Ensure the risks of a global workforce are appropriately included in your risk assessment.
Consider whether a “work from anywhere” policy should apply broadly, or to certain levels, by weighing the risks vs. the benefits of a global workforce against the company’s needs and strategy.
Ensure that management has created a global/mobile working policy in line with the company’s strategy and culture.

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