Remote Work Policies

Cross-Border WFH & Permanent Establishment: What the 2025's OECD Update Says OECD has published the 2025 update to the OECD Model Tax Convention, approved by the Committee on Fiscal Affairs on 13 October 2025 and by the OECD Council on 18 November 2025. A key highlight: important clarifications in Article 5 Commentary on when an individual’s home can become a “place of business” of the enterprise. Here’s a simplified take: a. Not every home office = PE An employee working from home in another country does not automatically create a Permanent Establishment. b. Key tests still apply: Permanence - Is the place used regularly and continuously? Business use - Is the home truly functioning as a place of business? Nature of activities - Are they core, or merely preparatory/auxiliary? c. 50% Working-Time Guideline If the employee works less than 50% of their total time from the overseas location in a 12-month period - generally no PE. If 50% or more, then a deeper factual review is needed. - The “Commercial Reason” Test – the critical determinant PE risk increases if the employee's presence facilitates business in that country, such as: meeting customers or suppliers, building/servicing a local client base, managing vendor relationships, sourcing or developing business opportunities If the WFH arrangement exists only due to employee preference or cost-saving, not business need - No PE. - Intermittent / incidental interactions: occasional meetings or light-touch activity in that country are not enough to trigger a PE. Bottom Line: The 2025 OECD Update makes one thing clear: Cross-border WFH does not automatically create a tax presence - but sustained, business-driven, on-ground activity can. A timely reminder for multinationals to revisit their remote work, global mobility, and PE risk frameworks. #OECD #OECD2025Update #ModelTaxConvention #PermanentEstablishment #Article5 #CrossBorderWork #RemoteWorkTax #GlobalMobility #InternationalTax #TaxPolicy #TransferPricing #BEPS #GlobalTax #CorporateTax #TaxUpdates #WFHCompliance

𝗧𝗮𝘅 𝗧𝗿𝗲𝗮𝘁𝗶𝗲𝘀 𝗶𝗻 𝗧𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻: 𝗪𝗵𝗲𝗻 𝗦𝘂𝗯𝘀𝘁𝗮𝗻𝗰𝗲 𝗕𝗲𝗰𝗼𝗺𝗲𝘀 𝗡𝗼𝗻-𝗡𝗲𝗴𝗼𝘁𝗶𝗮𝗯𝗹𝗲 Recent developments indicate that scrutiny assessments of Mauritius-based entities for FY 2023–24 (AY 2024–25) have witnessed a shift in approach. In several cases, instead of concluding assessments at the field level, matters appear to be getting referred to the FT&R division, with possible exchange-of-information requests being initiated with the Mauritius authorities to examine commercial substance. While this may seem like something within the law only, it reflects a broader and more deliberate focus on aligning treaty benefits with demonstrable economic presence. This trend can be viewed in the context of evolving judicial and regulatory thinking, including the Supreme Court’s ruling in the Tiger Global case, which has reiterated that treaty entitlement cannot rest solely on documentation such as a Tax Residency Certificate. The emphasis is clearly moving toward a “substance over form” paradigm, where factors like decision-making, control, financial capacity, and operational footprint are becoming increasingly relevant in determining eligibility for treaty relief. From a practical standpoint, this should not be seen as a cause for concern, but rather as a timely reminder. Structures involving Mauritius, and potentially other jurisdictions, may increasingly be subject to deeper scrutiny, including cross-border verification. For taxpayers and advisors alike, the message is clear: substance is no longer optional. Proactive review, robust documentation, and alignment of commercial rationale with legal form will be critical in navigating this evolving landscape. #InternationalTax #TaxTreaty #SubstanceOverForm #TaxCompliance #CrossBorderTax #MauritiusTax #ExchangeOfInformation #TaxScrutiny #GlobalTax #TaxAdvisory #TaxRiskManagement #EvolvingTaxLandscape #BEPS #TaxGovernance #Scrutinyassessments

“You live in Kenya. You work for a German firm. You’re paid in euros. So why is the Kenya Revenue Authority asking for your PIN?” Because in 2024, “remote” doesn’t mean invisible — at least not to the taxman. Kenya is now home to over 100,000 expatriates — many of whom are paid abroad, work online, and live in Nairobi, Naivasha, or Nakuru. But here’s the thing: If you spend 183+ days in Kenya, you’re considered a tax resident. If you're working for a Kenyan company (even while abroad), you need a KRA PIN. And if you're hiring remote Kenyan talent from overseas, you could trigger corporate tax liabilities without realising it. This isn’t just about income. It’s about compliance, cost, and consequences. We just released a sharp, simplified guide: 👉🏾 “Am I Being Taxed Twice?” – The Expat & Remote Worker Survival Kit for Kenya. The newsletter is attached and can be shared. It unpacks: ✅ How double taxation actually works ✅ Whether you're protected under a DTA ✅ What “permanent establishment” means for remote employers ✅ Why failing to register for a KRA PIN could block your salary, your lease—or worse This is for expats, global employers, and anyone who’s ever wondered: “How can I work in one country… and get taxed in two?” 💬 Questions after reading? We’re helping clients across the globe navigate this new reality. Because in the age of digital work, compliance is no longer a location—it's a strategy. #DoubleTaxation #RemoteWork #ExpatriatesInKenya #KRA #TaxCompliance #MMWAdvocates #CrossBorderLaw #TaxStrategy #LegalWithPerspective

📦 1000 orders, 1 wrong VAT rate = €4,000 lost. A German marketplace seller ships items worth €100 gross per unit to Sweden – but accidentally applies the German instead of the Swedish VAT rate. Sounds like a small mistake? In the end, it results in more than €4,000 in lost VAT – all due to a 6% difference in tax. 👉 That’s why VAT in cross-border selling isn’t just a bookkeeping issue – it’s a matter of strategic planning. In our latest article, including a full overview of VAT rates across the EU (plus the UK and Switzerland), we teamed up with our partner Taxdoo to highlight what sellers must keep in mind for 2025. Here are 5 practical takeaways: ✅ 1. OSS is no silver bullet The One-Stop-Shop (OSS) reduces effort – but only for B2C sales without foreign inventory. If you use FBA in Poland or also sell B2B, you’ll need additional VAT registrations. ➡️ Tip: Map out which countries are affected by your fulfillment setup early on – and register where needed.  ✅ 2. Marketplace = VAT responsible? Only sometimes. If a Chinese seller sells via Amazon to Germany, Amazon collects and remits the VAT. But: A German seller with inventory in Spain who delivers to Spanish customers remains fully responsible – even if Amazon handles fulfillment. ➡️ Tip: Always clarify: Who is VAT-liable in each case – the marketplace or you as the seller?   ✅ 3. Reduced rate or standard rate? It can make or break your margin. Example: Children’s books in France are taxed at 5.5%, not 20%. If you apply the wrong rate, you risk margin losses or tax audits. ➡️ Tip: Regularly match your product categories to target market VAT rates. Tools help, but in-house tax knowledge is key.  ✅ 4. New EU rules = new opportunities & risks Since 2025, EU countries can introduce two new VAT rates below 5% – e.g. for hygiene or educational products. At the same time, tax benefits for environmentally harmful products are being phased out. ➡️ Tip: A clean, compliant product assortment opens up tax advantages – and helps mitigate risk.  ✅ 5. Harmonised? Not really – the patchwork remains Denmark? No reduced VAT rates at all. UK? 0% VAT on children’s clothing.  Poland? Frequent changes.  Without a clear, country-specific VAT logic, things get messy – and risky. 💡 The takeaway for sellers: If you’re looking to scale your marketplace business across Europe, a solid VAT strategy is non-negotiable. OSS helps – but it doesn’t replace understanding your products, platforms, and target markets. 👉 Dive into the full article with more examples and practical insights: https://lnkd.in/dM_Trd6r  How have you set up your VAT processes? And what was your biggest learning moment?

Advising clients with cross-border trusts? If France is part of the picture, timing is everything. You’re not a trustee. You didn’t receive a distribution. And yet… you may still face a €20,000 penalty. Under French tax law, any trust with even a limited connection to France — a resident beneficiary, a French-domiciled settlor, or a French asset — falls within one of the strictest reporting regimes in Europe. The obligations are extensive : - Event-based declarations for any creation, modification, or distribution - Annual disclosures of all trust assets, regardless of location - Fixed penalties of €20,000 per missing form — even where no tax is due The key point? France doesn’t wait for a taxable event. Reporting is triggered by potential exposure — not actual income or distributions. That’s why even passive beneficiaries living in France can create filing obligations for the entire trust. In some cases, they may even be jointly liable for reporting failures. The risks are real — not just financial, but also operational and reputational. Many international families have faced: - Unexpected compliance obligations - Friction with long-standing trustees - The need to restructure existing arrangements Fortunately, these challenges can often be anticipated and managed, through: - Segregating the French-resident beneficiary’s rights - Reviewing trust terms and administration - Proactively addressing French reporting duties If you’re advising clients with French connections — or relocating with inherited structures in place — let’s talk. There’s usually a way forward. But timing matters.

𝗚𝗲𝘁𝘁𝗶𝗻𝗴 𝗧𝗮𝘅 & 𝗭𝗮𝗸𝗮𝘁 𝗥𝗶𝗴𝗵𝘁 𝗕𝗲𝗳𝗼𝗿𝗲 𝗬𝗼𝘂𝗿 𝗦𝗮𝘂𝗱𝗶 𝗟𝗶𝘀𝘁𝗶𝗻𝗴 As IPO activity in Saudi Arabia accelerates under Vision 2030, companies looking to list on Tadawul or Nomu face more than financial and regulatory hurdles. Tax, zakat, and international tax matters play a critical role in IPO readiness, investor confidence, and ongoing compliance. 🧭 𝗙𝗿𝗼𝗺 𝗭𝗮𝗸𝗮𝘁-𝗢𝗻𝗹𝘆 𝘁𝗼 𝗠𝗶𝘅𝗲𝗱 𝗥𝗲𝗴𝗶𝗺𝗲 Pre-IPO, many companies are owned by GCC nationals or mixed shareholders. Post-IPO, foreign investors enter the picture. Listed shares remain subject to zakat, but foreign founders’ shares are taxable. Accurately classifying and disclosing the zakat vs. tax split in the IPO prospectus is essential to meet CMA scrutiny. 💰 𝗭𝗮𝗸𝗮𝘁 𝗕𝗮𝘀𝗲 𝗮𝗻𝗱 𝗜𝗣𝗢 𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝘀 IPO proceeds can inflate the zakat base if unutilized and treated as zakatable assets. Proper treatment of capital increases, reserves, and retained earnings is key. Errors here can result in unexpected liabilities and erode investor trust. 🏗️ 𝗣𝗿𝗲-𝗜𝗣𝗢 𝗥𝗲𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗶𝗻𝗴 𝗮𝗻𝗱 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 Simplifying group structure, settling intercompany balances, and documenting related-party transactions are critical. A clean structure supports a smoother CMA review and enhances the company’s governance profile. 🌍 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗧𝗮𝘅 & 𝗣𝗘 𝗥𝗶𝘀𝗸 Foreign shareholders or board members can create permanent establishment (PE) risks. Influence from abroad may trigger Saudi tax obligations. Transfer pricing documentation must meet OECD standards. Early assessment and transparent disclosures help mitigate risks. 🧾 𝗩𝗔𝗧 𝗮𝗻𝗱 𝗪𝗶𝘁𝗵𝗵𝗼𝗹𝗱𝗶𝗻𝗴 𝗧𝗮𝘅 IPO-related advisory fees often attract VAT. Companies must assess recoverability and ensure compliant invoicing. Cross-border service payments and dividends to non-residents trigger withholding tax. Listed companies remain responsible for correct deduction and remittance to ZATCA. These require proactive planning and clear disclosures. 🕵️ 𝗭𝗔𝗧𝗖𝗔 & 𝗖𝗠𝗔 𝗘𝘅𝗽𝗲𝗰𝘁𝗮𝘁𝗶𝗼𝗻𝘀 CMA requires disclosure of tax risks, disputes, or assessments that may impact future earnings. Clean tax histories and health checks are standard in IPO workstreams. Early engagement with ZATCA to confirm classification, ownership mix, and compliance status can streamline the IPO process. 🏛️ 𝗦𝘁𝗿𝗼𝗻𝗴𝗲𝗿 𝗧𝗮𝘅 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 𝗣𝗼𝘀𝘁-𝗟𝗶𝘀𝘁𝗶𝗻𝗴 Post-listing, companies must adopt formal tax governance and board oversight. CMA expects robust systems to ensure compliance, safeguard shareholders, and protect market reputation. 🔄 𝗙𝗶𝗻𝗮𝗹 𝗧𝗵𝗼𝘂𝗴𝗵𝘁 An IPO is more than a capital-raising event; it's a long-term commitment to transparency and regulatory excellence. Companies that embed tax and zakat planning into their IPO strategy are more likely to gain investor confidence and succeed post-listing. #SaudiIPO #Zakat #IPOReadiness #CMA #ZATCA #SaudiArabia #Vision2030 #CMA #Tax

IRS Audit Campaign on Transfer Pricing Draws Significant Attention In light of the IRS's heightened focus on transfer pricing, it's essential for multinational corporations to reassess their compliance strategies. The recent audit campaign has generated a notable response from the business community, underscoring the critical nature of transfer pricing practices in today's global economy. Here are a few key takeaways: 1️⃣ Increased Scrutiny: The IRS is rigorously examining transfer pricing records and documentation. Companies must ensure that their transfer pricing policies are not only compliant but also well-documented and robust against potential audits. 2️⃣ Global Impact: This campaign reflects a broader trend of global tax authorities tightening regulations and oversight. Multinationals should be prepared for similar scrutiny from other countries' tax agencies. 3️⃣ Strategic Response: Businesses should proactively engage with tax advisors to conduct thorough reviews of their transfer pricing policies. Being ahead of the curve can mitigate risks and align with best practices globally. 4️⃣ Opportunity for Optimization: This is also an opportune moment to identify potential efficiencies and savings in your current transfer pricing strategies. Innovative solutions can lead to significant tax optimizations and compliance improvements. As a tax professional, I encourage all businesses engaged in cross-border transactions to take this campaign seriously and review their transfer pricing strategies. The cost of non-compliance can be high, not just in penalties but also in reputational risk. For those looking for guidance or needing to discuss specific concerns, feel free to reach out. Let’s ensure your transfer pricing strategies are both compliant and optimized for your business success! #TaxCompliance #TransferPricing #IRS #TaxStrategy #GlobalBusiness

Last week I was on a call with a controller at a fast-growing UK-based company expanding into the U.S. They had just signed their first two six-figure U.S. contracts in the same state. Invoice going out in a week. And one very reasonable question: “Should we be charging sales tax on this — and what happens if we get it wrong?” The honest answer is the one most vendors don’t like giving: There isn’t a single “correct” answer. In theory, they should be registered before the second invoice. In practice, deals close before registrations do. And in reality, the risk isn’t binary. They will have to make a tradeoff. Each possible approach has different implications for cash, customer experience, audit risk, and internal workload. This is why Logan Jackonis coined the phrase "Practical Compliance." At Commenda this has become a simple philosophy that we use to engage with our customers. Not “ignore the rules.” Not “maximum compliance at any cost.” But aligning compliance decisions with business reality. Being explicit about the risks you’re taking and why. For finance leaders, this is increasingly the job they have to do every day. Translating policy into operational decisions and making judgment calls under pressure. In today's rapidly changing cross-border compliance landscape, you really don't have any choice but to take a more practical and strategic approach to compliance. There are companies I speak to that ship something under one tariff rate, and when it arrives it will receive an entirely separate one. The companies that struggle aren’t the ones that don’t care about compliance. They’re the ones that were told there was only one right answer, when in reality they needed a practical strategy aligned with their business needs.

Last month, I reviewed a return where nothing looked “𝘄𝗿𝗼𝗻𝗴.” Income was clean. Deductions were supported. Credits calculated properly. But something felt off. The client had foreign financial accounts. 𝗦𝗰𝗵𝗲𝗱𝘂𝗹𝗲 𝗕 𝘄𝗮𝘀 𝗺𝗮𝗿𝗸𝗲𝗱 𝗰𝗼𝗿𝗿𝗲𝗰𝘁𝗹𝘆. 𝗕𝘂𝘁 𝗙𝗼𝗿𝗺 𝟴𝟵𝟯𝟴 𝘄𝗮𝘀𝗻’𝘁 𝗮𝘁𝘁𝗮𝗰𝗵𝗲𝗱. The threshold was crossed. It was a small miss. No drama in the software. No red flag warning. Just one form not included. Now here’s why this matters. According to IRS enforcement data from recent years, penalties related to foreign information reporting can start 𝗮𝘁 $𝟭𝟬,𝟬𝟬𝟬 𝗽𝗲𝗿 𝗳𝗼𝗿𝗺 — 𝗲𝘃𝗲𝗻 𝘄𝗵𝗲𝗻 𝗻𝗼 𝘁𝗮𝘅 𝗶𝘀 𝗱𝘂𝗲. Not for fraud. Not for evasion. Just for not filing the right form. That’s what makes this interesting. The tax calculation was fine. The compliance layer was not. And that’s where most firms feel pressure today. Not in calculating income. But in tracking reporting obligations across: • 𝗙𝗕𝗔𝗥 • 𝗙𝗼𝗿𝗺 𝟴𝟵𝟯𝟴 • 𝗙𝗼𝗿𝗺 𝟱𝟰𝟳𝟭 • 𝗙𝗼𝗿𝗺 𝟴𝟴𝟲𝟱 • 𝗙𝗼𝗿𝗺 𝟯𝟱𝟮𝟬 Form 8938 thresholds vary based on filing status and residency. 𝗦𝗶𝗻𝗴𝗹𝗲 𝗹𝗶𝘃𝗶𝗻𝗴 𝗶𝗻 𝘁𝗵𝗲 𝗨.𝗦. → $𝟱𝟬,𝟬𝟬𝟬 𝗮𝘁 𝘆𝗲𝗮𝗿-𝗲𝗻𝗱. 𝗠𝗮𝗿𝗿𝗶𝗲𝗱 𝗳𝗶𝗹𝗶𝗻𝗴 𝗷𝗼𝗶𝗻𝘁𝗹𝘆 → $𝟭𝟬𝟬,𝟬𝟬𝟬 𝗮𝘁 𝘆𝗲𝗮𝗿-𝗲𝗻𝗱. 𝗟𝗶𝘃𝗶𝗻𝗴 𝗮𝗯𝗿𝗼𝗮𝗱? 𝗗𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁 𝗻𝘂𝗺𝗯𝗲𝗿𝘀 𝗲𝗻𝘁𝗶𝗿𝗲𝗹𝘆. Many preparers remember the form. Fewer double-check the threshold logic every year. Tax today is less about rates. It’s about reporting. And reporting penalties are often fixed amounts — not percentage-based. That changes the risk calculation completely. 𝗧𝗵𝗲 𝗹𝗼𝗻𝗴𝗲𝗿 𝗜 𝘄𝗼𝗿𝗸 𝗶𝗻 𝘁𝗵𝗶𝘀 𝗳𝗶𝗲𝗹𝗱, 𝘁𝗵𝗲 𝗺𝗼𝗿𝗲 𝗜 𝗿𝗲𝗮𝗹𝗶𝘀𝗲: Returns don’t usually break because of complicated math. They break because of overlooked reporting layers. That’s where discipline shows. — 𝗛𝗶𝘁𝗲𝘀𝗵 𝗣𝗮𝘁𝗲𝗹,𝗘𝗔 #USTax #TaxCompliance #Form8938 #InternationalTax #CPAFirm #TaxPreparation #IRSReporting TaxicMinds Yash Panchal, EA

Is global indirect tax compliance having a SOC-2 moment? I think it very well could be... There are several macro themes in this space that we need to consider: 🌏 Businesses are going global earlier and earlier: this means they have to deal with cross border transactions and indirect tax compliance at an earlier stage when they don't have the right infrastructure and resources to do so. 📜 Indirect tax regulation is evolving: COVID-19 depleted international governments funds and a major way to recoup this has been through cracking down on international transaction taxation. Various jurisdictions are especially focused on cross border technology/e-commerce sales (e.g. as of April 1 2024, payment processors, like Stripe, have to report companies to the EU commission who have more than 25 transactions / quarter in the EU, regardless of whether they are registered for VAT or not: https://bit.ly/3yslgsB). That means a lot of US companies selling into the EU are going to start getting notices from tax authorities! ✨ AI can automate compliance operations: to date, the indirect tax sector has been fraught with manual processes. A fragmented market of tax lawyers and accountants comb through legislation manually, which is costly and prone to error. There are obviously some processes (that usually require interpreting parts of the law that are ambiguous) which are not so easy to replace with software. But there are many workflows that can be vastly improved and largely automated with AI. E.g. helping determine whether products are taxable vs non taxable across various jurisdictions; collecting and monitoring unstructured tax rate data across the web - all tasks well suited to LLMs. All this to say, that indirect tax is becoming something that's harder to ignore for modern global companies. In many ways, it feels a little bit like the SOC-2 moment for startups. Prior to companies like Vanta, startups never really thought of certifications like SOC-2. Now it's a 'need to have' if you want to sell to enterprise. We believe we're going to see a similar movement with indirect tax compliance as governments clamp down on cross border transactions from fast growing software and AI companies.