For businesses, cross-border working has changed and diversified in recent years as businesses have sought to attract talent internationally and provide their own employees with greater freedoms to work where they want.
The motivations for prioritizing a globally mobile workforce are clear and complementary. Cross-border work opportunities are a benefit many employees value and seek when job-hunting, while it also widens the applicant pool for employers that eye upgrading their talent.
Talent has become borderless, and for global businesses, there has been pressure to accommodate international working arrangements for existing employees. Businesses are seeing this as necessary to allow them to attract and retain key employees outside domestic markets, and to foster global business growth to meet the needs of clients.
Though there has been a growing trend of return-to-office mandates, many businesses have continued to explore modes of cross-border working that are intended to support the execution of strategic initiatives, enable growth and attract the best talent.
Recognizing these global workforce developments and the importance of global mobility and cross-border working for international businesses, the Organization for Economic Cooperation and Development (OECD) announced in 2025 that global mobility would be a key area of focus going forward with an “evidence-based approach” to assessing current challenges and misalignment between international tax rules and modern modes of cross-border working.
Importantly, this review of global mobility is to be undertaken by the Inclusive Framework (IF), a group of more than 140 country tax authorities that are collaborating on global tax rules. The IF has already gathered public input on these tax issues, suggesting that any future developments in tax rules on global mobility will have broad stakeholder input as well as widespread adoption into treaties.
The first step taken by the OECD in addressing the state of guidance and how it relates to modern-day working practices was to update existing commentary defining how a corporate taxable presence, a Permanent Establishment (PE), may be created by an employee working remotely from a home office (read more here). The change in guidance was welcomed as business-friendly, providing a de minimis days-of-presence threshold, under which an employee would be unlikely to create a PE.
The OECD subsequently sought input from external stakeholders during a public consultation on global mobility in December 2025 and a stakeholder meeting in January 2026. The public consultation was broad, seeking input on all aspects of tax and global mobility.
What isn’t clear yet is what the focus of the IF will be and while further guidance is expected in late 2026 and early 2027, the following areas will likely be under review.
Defining global mobility
One of the biggest challenges to date has been how the OECD defines global mobility to determine what is being addressed and how tax rules may evolve to address working trends across global workforces. Global mobility of employees should be conceived of beyond one-directional relocations, where an employee physically moves from “Country A” to “Country B.” “Global mobility” has more diversity in cross-border working that could fall within the mobility of services from employment that employers are seeking to address.
By defining the scope and nature of global mobility, the parameters and understanding of issues arising from employee international mobility will be more effectively facilitated. The table below provides an overview of contemporary forms of global mobility that sees employees working across and moving across borders.
This “Forms of global mobility” illustration shows many different work situations for globally mobile workers and how they have changed and expanded recently. The chart shows “traditional mobility” divided into two forms: “expatriate arrangements” and “business travel,” each with their own subcategories such as “frontier workers,” “permanent transfers,” “short-term” and “long-term.” “Contemporary mobility” breaks into three forms: “remote working,” “hybrid working” and “outsourced resourcing.” Those contain newer, more digital-driven subcategories such as “pop-up offices,” “digital nomads,” “work from anywhere,” “short-term remote” and “independent contractors.”
These employment structures differ significantly between “traditional” forms of global mobility and contemporary forms of working. In defining mobility broadly and tying it to the broader concept of a global workforce, the review of tax rules will consider both newer forms of mobility and potential future modes of mobility.
Why it matters: Businesses face a myriad of tax compliance obstacles when operating internationally. The OECD’s broader focus on global workforce and mobility means there is a greater potential that tax considerations of modern ways of working will be addressed.
The importance of residency
To apply for relief under a treaty, an individual must be a resident of one of the two countries. Where an individual is resident in both countries as a dual resident, residency is determined based on a series of “tie-breaker” tests. The first test determines where an individual has a permanent home available to them.
With shifting demographics, younger or lower-paid employees may be unable to buy a home and may also have to relinquish a rental property during a period of mobility. In this scenario, they would not have a permanent home in their home resident country. This could result in these employees establishing tax residency in a country as they cannot demonstrate having a permanent home in their home country, despite having closer economic and social ties.
Why it matters: Resident taxation rights may be given to a country where an individual has fewer ties and only a temporary presence. It could also mean an individual could not benefit from tax relief elsewhere in the treaty, such as an employment income clause where they spend under 183 days in the other country. A change in this situation as a result of the OECD review would better reflect generational demographics where social and economic ties may be more relevant than the availability of a home.
Permanent establishment
It has become increasingly common for companies, from start-ups and high-growth companies pursuing international growth to public companies, to seek talent beyond the national borders of the country in which the company is resident. The rise of the digital labor “platform economy” has enabled companies seeking talent to pursue rapid growth by accessing talent in non-domestic jurisdictions. At the same time, governments have invested in the development of skilled labor in certain industries, such as technology, to both stimulate domestic economic growth and attract foreign direct investment via foreign companies.
For companies hiring talent outside their domestic labor market, they may engage employees remotely working from home who are engaged in the core business of the enterprise (and not preparatory and auxiliary activities). In this scenario, the activities of the employees and company may have no economic integration into the country in which the employees are resident, as they may lack any of these:
- A commercial reason for them to be based in that country
- A market focus
- Management decision-making or signatory authority
- Local customers
- A physical office space
with all productive activities exported to the country in which the employer is resident.
Even when the number of employees hired in a country increases, there may be little economic substance to the work they perform. As businesses scale across borders, they would be facilitated by a de minimis level under which the presence of employees pursuing activities unrelated to and not integrated with the local economy is not seen to create a corporate taxable presence as a PE. Criteria could include factors such as global turnover, number of employees and expanded permissible activities beyond those that are preparatory and auxiliary.
Why it matters: The risk of creating a “micro-PE” can increase operational costs through a compliance administration burden for businesses seeking growth (read more here). Businesses need certainty in how their international operations will be treated for tax purposes, while also operating in a regulatory environment that stimulates and enables cross-border growth rather than inhibiting it.
For these reasons, the current focus of the OECD and the IF on global mobility taxation is a positive development that has the potential to reshape tax rules that impact how businesses operate across borders.
Contact:
Partner, Global Mobility Services Practice Leader,
Grant Thornton Advisors LLC
Richard is a partner in our New York Human Capital Services practice and leads the Global Mobility Services practice in the United States.
Nyc, New York
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