OECD commentary on cross border issues

The OECD has officially recognised the problems caused by Covid-19 restrictions for cross-border workers unable to perform duties in their country of employment, individuals stranded in a country which is not their country of residence and employees currently laid off seeking relief from a government incentive in the country of their employment. There is also some commentary regarding the impact this may have on companies in terms of residence status and permanent establishment with regards to the right to tax between countries.

The OECD Secretariat has issued guidance on these issues, stating that “the exceptional circumstances of the COVID-19 crisis call for an exceptional level of coordination and co-operation between countries, notably on tax issues, to mitigate the potentially significant compliance and administrative costs for employees and employers. The OECD encourages countries to work together to alleviate the unplanned tax implications and potential new burdens arising due to effects of the COVID-19 crisis.

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