CONVINUS Global Mobility Insights NEWSLETTER Herbst / Fall 2022

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Global Mobility Insights - Herbst / Fall 2022 tion of 20% of the remuneration for the provision of services must be taken into account, in particular in cases of virtual secondment to Austria. In this case, the Romanian group company could, under certain circumstances, establish a permanent establishment in the country of residence and employment (in this case Austria) if that country follows the concept of an economic employer and the group company in Romania is to be regarded as the economic employer due to the transfer of personnel costs (the employee is therefore economically attributable to the Romanian company). The establishment of a permanent establishment by the employer in Romania is excluded due to the fact that the employee does not reside predominantly in Romania, or if the situation is to be regarded as assignment of employees (personnel leasing), no permanent establishment would be established, because according to the prevailing view, the establishment of a permanent establishment is excluded in such cases. Social security contributions are continuously to be paid by the employer in the country of employment (Austria). 4) Workation: Employee in country X has an employment contract with an employer in country X. The employee temporarily relocates to country Y and continues to work from there for the employer in country X. Country X is almost always a vacation destination. Example: Employee of an Austrian company, residing in Austria, performs work from a Greek island for 3 weeks. Tax and social security consequences: Whether an income tax liability arises in the "vacation country" depends on whether the residence was maintained in country X (Austria) as well as whether a DTA exists between country X (Austria) and the vacation country (Greece) and how long the employee stays in the vacation country. If the employee gives up his residence in country X (Austria), no DTA would be applicable and the DTA protection against possible double taxation would cease to apply. That means, in the non-DTA case, double taxation of the employee's income could occur. If a DTA is applied, a tax liability would arise in the vacation country if the employee stays there for more than 183 days in a calendar year or in a 12-month period. 30 convinus.com

Global Mobility Insights - Herbst / Fall 2022 The establishment of a permanent establishment by the employer in the vacation country (in this case Greece) is rather unlikely in DTA cases. According to the prevailing view, a minimum period of 6 months would be necessary for this. In non-DTA cases, the establishment of a permanent establishment would be conceivable. From the perspective of social security law, the responsibility for social security would initially remain in the employer's country (Austria) for up to 60 months; in relation to third countries, this could lead to double insurance. This means that in the latter case, both the employer country and the “vacation country” could potentially claim payment of social security contributions. Contact: Wien ARTUS 24 Stubenring Wien A-1010 +43 1 5137900-0 T: wien@artus.at E: Baden ARTUS 3 Wassergasse Baden A-2500 +43 2252 204-0 T: baden@artus.at E: Shortages of skilled workers, global health crises and advancing digitalization and technologies are making it increasingly attractive to employ people abroad. Various models are available for the employment of people abroad. In this context, however, tax and social security aspects must be taken into account. In order to keep compliance costs low abroad, comprehensive advice is required in advance. convinus.com 31