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Limit or 20 days working abroad

  • 09-02-2022 11:16pm
    Posts: 61 ✭✭ [Deleted User]

    Firms including Facebook and PWC, have brought in policies that limit their employees to 20 days working abroad.

    Any idea why they decided on 20 days?

    Can't think of a tax reason.


  • Registered Users Posts: 2,833 ✭✭✭ ari101

    It may be a somewhat arbitrary number deemed to be low risk as it is unlikely to constitute more than a decent holiday?

    I assume it stems from issues related to where an employer is supposed to run payroll, pay PRSI and related employer taxes, whether they are opening themselves up to paying corporation tax in a foreign country etc. by letting an employee work there. The answers to those questions are very specific to the country in question's laws, bilateral agreements between countries, the nature of the work carried out, etc. Now with so much remote working employers have to manage a new risk, as they could be liable to taxes in a foreign jurisdiction if their employees work abroad. So I guess it is easier to set a limit below which no one can do more that work while on holiday that should not trigger any tax liabilities.

  • Registered Users Posts: 3,556 ✭✭✭ FishOnABike

    There's a number of other possible reasons, possible need for the company to have a 'permanent establishment' in another country, conform to employment and pay legislation in another country, possibility of effect on taxation of intellectual property and profits.... all varying by each country.

    There must be a significant administrative overhead in monitoring and keeping records of where employees are working from, increased complexity and risk in trying to keep up to date and interpret employment, taxation and corporate law in multiple jurisctions.

    From forty days they may qualify for foreign earnings deduction which impacts payroll processing as there may reduced Irish Income Tax, USC and PRSI liabilities.

    Some leeway may have been given during the thick of CoViD-19 travel restrictions but regulations will be followed more to the letter of the law with restrictions being lifted. It's an aministrative and compliance nightmare that I'd understand most companies would rather avoid if possible.