Working remotely across borders

It’s a daydream made more achievable by pandemic years: being employed in a city, but working from the sand beaches of the world. Or from your parent’s house, with mum-cooked meals on the side.

However, it’s important to ask: when my employer allows me to work remotely, does it mean I can home office across borders? Working when visiting my country of origin? Working and travelling, as a digital nomad?

The short answer is sadly, no, it doesn’t.

You have no legal ground to demand working remotely from abroad; quite on the contrary, should your employer find out you’re home-officing across borders, he can use such a fact as grounds for termination of employment.

There are many legal complications connected with being employed in Brno but actually working elsewhere abroad (taxes, occupational safety, premiums, data security, social security benefits, to name just a few). Employers in Brno approach this question very differently – some strictly ban it, regularly checking from where their employees connect; some turn a blind eye. Some allow it – case by case or even flatly, for all their employees.

We invited a lawyer, Katka Hájková from Two Lawyers platform, to:

  • explain the common pitfalls of this arrangement,
  • and the reasons why your employer might hesitate to allow it.
  • And to also suggest possible solutions you could argue with to change their mind.

Watch the recording of her answers:

A small sample of the questions discussed:

From the legal point of view, what exactly working remotely across borders means?

It means having your Place of Work abroad. A Place of Work is the place where you work permanently. Within this place, the employer may assign work to you.

Does it cause any problems in the taxation of income?

There are two main problems: Tax Residency and Permanent Establishment. The Employee’s income will be taxed in the country of his Tax Residency. Where is their Tax Residency? Generally, it is the country of their Domicile. And where is their Domicile? Generally, it depends on how many days per Tax Year you spend in a country. Often, if you stay in a certain country longer than 183 days per calendar year, that is the country of your domicile. But it always depends on the Double Taxation Treaty between the Czech Republic and the specific country.

Permanent Establishment is a fixed place of business that gives rise to income. And it can originate when an employee works from abroad for an extended period of time. Often, it is 6 months within 12 months period. A PE can be a branch, place of management or office, it can be a project manager or IT specialist working from a rented flat, or café. The problem is that the profits of the PE are taxed in that country.

What about health and social insurance?

The basic rule is that Social and Health Security contributions are paid in a single country, and benefits are collected in a single country. Usually, it is the country in which you work. But: if you are sent by the Czech employer to another EU country (or you home office abroad) and it lasts up to 24 months, you remain a participant in the Czech social security system. Thus, the employer pays contributions to the Czech system and you draw benefits from the Czech system.

But if you go abroad for a home office or even a business trip, you should have a Statement of applicable legislation, “Form A1”. This is a certificate confirming which social security system you participate in.
Other issues that Katka talks about concern differing time zones, premiums, added costs in electricity and other bills, data security, etc.

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