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Transfer Pricing Considerations for Remote Workforces

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The COVID-19 outbreak has led many countries to implement border controls as a temporary measure to curb infections, and many employers find their employees working from home or in locations outside the jurisdictions where employers typically operate or are located. International travel restrictions affect Boards of Directors and employees of multinational enterprises, alike, who find themselves marooned in various different locations around the world. Those unexpected remote employment and business activities may trigger a local tax presence for which the employer has not planned. This will in turn give rise to international tax complications, including increased permanent establishment (PE) risks and in some circumstances, a change in corporate tax residency.

This article, part of Baker McKenzie and Bloomberg Tax’s Special Report, discusses the issues arising from these remote business and employment activities as well as the risks that such remote activities could cause if they continue after the COVID-19 crisis is resolved (where personnel continue to desire or demand to work remotely). There are individual tax implications for employees working remotely abroad that are not discussed in this article but are worth considering together with the tax implications for corporations.

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Géry Bombeke is a partner in the Tax Practice Group of the Brussels office. He joined Baker McKenzie in 2004, after several years of experience in a Big 4 and related law firm. He became partner in 2010.

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Ivan Morales, a member of Baker McKenzie's Tax Group, works primarily on international taxation. He previously served as tax counsel for Chevron Corporation and was clerk for the Honorable Judges Vasquez and Swift of the United States Tax Court in Washington DC. In addition to his practice, Mr. Morales is frequent speaker for the Tax Executive Issues and the Alliance for Tax, Legal and Accounting Seminars. He is a member of the State Bar of California Section of Taxation and the Florida Bar.

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Stephanie's practice focuses on the Canadian tax aspects of corporate mergers, acquisitions, divestitures, reorganizations, financings and other tax planning in both the international and domestic contexts. Stephanie has particular experience advising on Canadian tax issues affecting multinationals with operations in Canada, including inbound structuring, cross-border employee mobility, withholding tax, and tax treaty issues, and on matters relating to executive compensation. Stephanie has industry specific experience in sectors including technology, media and telecommunications, energy, mining and infrastructure, and consumer goods and retail.

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Andrew Morreale is a partner in Baker McKenzie's Tax Practice Group in Toronto. Prior to joining the Firm, Andrew clerked for the judges of the Tax Court of Canada, was a corporate tax instructor at the University of Windsor, Faculty of Law and practiced in the international tax services group at a major accounting firm.

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Bruno Dominguez is the managing partner of Baker McKenzie's Barcelona office, head of the Tax practice in Barcelona and Chair of our Wealth Management Practice in EMEA region. Bruno has been coordinator of the Master of Laws in Taxation at the University of Barcelona, and associate professor at ESADE Business School. He has written several articles and regularly speaks at conferences and seminars on business restructuring, transfer pricing, wealth management and taxation of family businesses.

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Krystal Ng is a partner in the Tax, Trade and Wealth Management Practice Group of Wong & Partners with over 10 years of experience. Her primary focus is on tax and transfer pricing issues in the context of crossborder transactions as well as post-mergers and acquisitions integration for multinational clients in a wide range of industries.
She has been recognised as a Next Generation Partner by Legal 500 Asia Pacific 2023, and is named as Up and Coming for Tax in Chambers Asia Pacific 2023. In the Chambers guide, clients commend her for being "a very responsive and knowledgeable tax consultant." She was also awarded the Tax Rising Star award by Euromoney Women in Business Law Awards Asia Pacific 2022.
Krystal's practice extends to the provision of strategic tax advice on a broad range of subjects such as income tax, double tax treaties, withholding tax, real property gains tax, assisting with tax incentives and exemptions as well as the planning and management of transfer pricing considerations to achieve an optimal and more tax effective model on a domestic, regional or global level.
She is regularly called upon by clients to advise on international and domestic tax planning matters concerning in-bound investments to achieve an optimal and effective business model, tax structuring and integrations postmerger and acquisitions as well as negotiating tax incentive applications for foreign investments into Malaysia.

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Imke Gerdes is a partner in Baker McKenzie's New York office, co-chair of the New York and Miami Inclusion and Diversity Committee and a member of the Firm's North America Transfer Pricing Steering Committee. Before joining the New York office, she was a partner in the Firm's Vienna office. Imke is admitted to the German Bar, the New York Bar and she is admitted as tax advisor ("Steuerberater") to the Austrian Chamber for Tax Advisors.

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Christopher (Chris) S. Raybould is the Canadian Transfer Pricing Practice Leader and Director of Economics for Baker McKenzie in Toronto and previously served as a member of the firm’s North American Transfer Pricing Steering Committee. Mr. Raybould handles transfer pricing advisory work in various capacities. He advises on and assists in negotiating advance pricing arrangements, pursuing competent authority assistance, provides audit defense representation, appeals support, and Transfer Pricing Review Committee representation. He also advises on a variety of other types of transfer pricing projects, including BEPS related advice, risk identification and assessment, planning and compliance studies, and assists with the transfer pricing aspects of business conversions and restructurings, acquisition due diligence and integration. Mr. Raybould has extensive experience in a number of industry sectors including automotive, pharmaceutical, food, financial investments and products, manufacturing, consumer businesses, technology, and commodity-based businesses. Mr. Raybould is an author on transfer pricing issues and a frequent speaker.

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Shane Koball is a director of economics in Baker McKenzie's New York office. He has extensive experience advising multinational corporations from the industrial products, life sciences, automotive, retail and consumer products, and media and advertising industries on transfer pricing planning, compliance and dispute resolution, as well as supply chain planning and restructuring. Prior to joining the Firm, Mr. Koball was a senior manager in the international tax services practice of well-known audit firm.

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Davinia Rogel has 8 years of extensive experience in tax planning and consultancy, as well as representing clients faced with tax audits and court procedures in Spain. She specializes in tax issues affecting multinational groups and restructuring companies. She has extensive experience in the tax field of wealth management assisting clients in planning and protecting their futures. She works closely with investment advisors, accountants, pension consultants, life underwriters and banking representatives to develop comprehensive wealth plans. She is the author of several articles and a regular speaker at conferences and seminars on wealth management and business restructurings. She is also a regular contributor to Baker McKenzie publications: Apuntes de Actualidad, Private Banking Newsletter, European Tax Newsletter, Aranzadi, etc.

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