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Practice review: a remote team accidentally creating a permanent establishment
The ongoing activity of overseas remote staff can create a permanent establishment locally, triggering corporate income tax.
A typical scenario (not a specific real case): a company has only a few remote sales staff in a country, yet a tax audit finds a permanent establishment, owing local corporate income tax on related profit.
PE assessment usually turns on a fixed place of business, whether staff can conclude contracts, and whether activity exceeds the auxiliary threshold.
The lesson: cross-border remote staffing must be assessed on both labor and tax lines, using a local entity or employer-of-record where needed to avoid inadvertently creating a tax liability.