Pitfalls for both sides: Workation risks: extra tax and establishment of a permanent establishment
Anyone who works abroad should know the 183-day rule. What tax consequences a longer workation can have for employees - and for companies.
People planning to work remotely from a European holiday region while employed by a German company should consider tax implications. According to Daniela Karbe-Geßler from the Bund der Steuerzahler Deutschlands, the 183-day rule from double taxation agreements usually applies when working abroad in the EU. If a person stays less than 183 days abroad, keeps their residence in Germany, and receives a salary from a German company, they remain tax liable in Germany.
However, exceeding the 183-day limit may lead to tax payments in the workation country, and making key business decisions abroad can inadvertently establish a permanent establishment, triggering extensive tax and legal obligations.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
