CONVINUS Global Mobility Insights - Sommer / Summer 2024 Conclusion With this practical example, we have highlighted the most important aspects for you to consider and shown which issues need to be taken into account and regulated. As can easily be seen from this practical example, it is highly advisable for companies operating across borders to involve internal or external competent professional support with extensive experience in these cross-border matters (in this case between Germany and Switzerland) in good time during the planning and implementation stages. Finally, we would like to point out that, based on our many years of experience, it is also advisable to subject new projects, even if they appear to be similar on the surface, to a professional review and not simply to adopt the approach from previous similar or similar cases without a professional review. As the differences in such cross-border matters with two (or more) different legal systems are very often hidden in the details, such an approach can lead to unwanted complications, legal difficulties or, for example, surprising additional costs for the company during or after a project. Contact: CONVINUS global mobility solutions Talstrasse 70 CH - 8001 Zurich Switzerland +41 (0) 44 250 20 20 info@convinus.com convinus.com 38
CONVINUS Global Mobility Insights - Sommer / Summer 2024 Rendering management services across borders involving Scandinavia Author: Malene Overgaard, Partner, Schjødt 1. Introduction Delivering management services from a parent company or from another subsidiary to other entities within a group across borders may provide numerous benefits. By consolidating these services into a centrally managed organisation, the business can achieve efficiencies and cost savings that might otherwise be difficult to obtain. However, there are several tax aspects and risks that should be identified and considered when rendering management services across borders – both if an employee will continue working from his/her home country for a foreign company or if an employee will work abroad. Relevant topics are tax consequences for the employee, social security coverage, different reporting and withholding tax obligations for the employer, transfer pricing issues, risk of permanent establishment or effective seat of management, etc. This article will highlight typical tax issues involved in rendering management services across borders from a Danish, Norwegian and Swedish point of view. Please note that this article only highlights the main rules. Specific consultation should always be sought. There are other relevant aspects as well, such as employment law issues, commercial drive etc., but in the following we will only focus on the tax considerations. 2. Typical tax risks to consider 2.1. Potential tax liability for an employee working in multiple states If an employee works in another state than the home country, the employee may be tax liable in this country as well, and have obligations to file tax returns. When working in Denmark, without living in Denmark, the employee becomes taxable in Denmark on salary related to work performed physically in Denmark for 39
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