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+++NEW+++ CONVINUS Global Mobility Insights NEWSLETTER Herbst / Fall 2022

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«Familiar expertise in a new look - the next generation of our popular CONVINUS newsletter is here! » To take the next steps, we have repackaged our popular newsletter and given it a modern layout. We cannot master the challenges in the Global Mobility sector alone, so we offer our great CONVINUS Global Network partners a special platform here. In each of our newsletters we will introduce you to some of them. The issues that concern you also concern us. For this reason, we are pleased to present the autumn issue 2022, with the following focus: «Remote Work / Digital Nomad / Home Office» • CONVINUS for the perspective from Switzerland • Globalization Partners for a global overview • Artus for the perspective from Austria • Corporate Relocations Greece for the perspective from Greece

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Global Mobility Insights - Herbst / Fall 2022 Authors: Sieglinde Buttinger & Michael Obernberger, ARTUS (Austria) Remote working Not least due to the Covid-19 crisis, the topic of remote working has become more and more a focus in the last two years. Also, the everadvancing technology and digitalization make working remotely possible without any problems. The following models are available in relation to cross-border activities: Foreign local hire Cross-border home office Virtual secondment Workation In this regard the following issues must be examined in all types: Wage tax risk Permanent establishment risk Social security 1) Foreign local hire: In this model, an employer in country X concludes a contract of employment with an employee in another country Y. The employee continues to work in the country of residence Y. Example: An employer in Austria concludes an employment contract with an employee in Romania. Tax and social security consequences: In these cases, 100% of the income tax is due in the country from which the employee performs 100% of his work. Income earned on individual working days in the employer's country (Austria) is taxable in the employer's country. The obligation to withhold income tax in Romania must be examined on a country-specific basis and is usually linked to the existence of a permanent establishment in the employee's country of residence. The permanent establishment risk depends on whether a double taxation agreement (DTA) has been concluded between country X (Austria) and country Y (Romania). If so, it depends on how the permanent establishment is defined in the DTA (fixed place of business, agency permanent establishment or service permanent establishment) and from where the employee works (home office, office rented by the employer, office of a group company). Within the EU/EEA, according to the territoriality principle, the obligation to pay social security contributions exists in country Y (here Romania), the employer would therefore have to register in country Y (Romania) and pay social security contributions there, unless the employee assumes this obligation and concludes a 28 convinus.com

Global Mobility Insights - Herbst / Fall 2022 corresponding agreement with the employer (agreement acc. to article 21 para. 2 Reg. (EC) 987/2004). In connection with third countries, the obligation to pay social security contributions in the residence country of the employee must be examined on a case-by-case basis. 2) Cross Border Home-Office: An employer in country X offers his employee to perform part or all of his work from his home office in country Y (corresponds to foreign local hire in case of 100% home office activity, see above). Example: as above, but only partial activity in the country of residence (instead of 100%). Tax and social security consequences: Wage tax liability in the employee's country of residence (Romania); if a single day of work is performed in Austria (employer’s country), wage tax would be due there on a pro-rata basis. Permanent establishment risk needs again to be checked on a country-specific basis. Social security: If at least 25% of the activity is carried out in the employee's residence country Romania, then Romania would be the responsible country for social security payments. If less than 25% of the activity is performed in the residence country of the employee, the employer country (Austria) is responsible for social insurance (contributions are in this case to be paid in Austria). The 25% limit is to be determined on the basis of a 12-month period. With regard to employees who are third-country nationals, the obligation to pay social security must be examined on a case-bycase basis. 3) Virtual secondment: Employee in country X with employer in country X takes over a temporary function for a group company in country Y. The employee will, however, continue to work physically in country X for the group company in country Y. Example: Employee of an Austrian company, residing in Austria performs activities for the Romanian group company. Tax and social security consequences: Wage tax is generally withheld in the country of the employer. If the country in which the group company is domiciled (Romania) follows the economic employer concept, the employee would be liable to pay tax there from the first working day that he/she spends there. Furthermore, a possible withholding tax obliga- convinus.com 29

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