Taxation of cross-border teleworkers globally and the impact on the EU

The EESC's Economic and Monetary Union and Economic and Social Cohesion section (ECO) has issued an opinion on global cross-border teleworker taxation and its impact on the EU. The section advocates for adapting tax rules to remote work realities to ensure internationally recognised and agreed rules leading to tax clarity for workers and businesses, addressing tax challenges while promoting remote work benefits and digitalization. ECO suggests taxing teleworkers in their employer's country of residence for simplicity reasons, proposing measures to prevent discrimination and to introduce a one-stop mechanism and a revenue-sharing mechanism between countries. This opinion is set for discussion and adoption by the EESC during its March 2024 plenary.

Key points:

In the opinion, the EESC's ECO section

• proposes that the preferred option for taxation of employee income is in the employer's country of residence. This approach aims to simplify taxation for employees and potentially be attractive for employers;

• emphasises that teleworkers should not suffer any discriminatory tax treatment compared to cross-border workers who perform their work in the country of the employer. This recommendation aims to ensure fairness in taxation across different work arrangements;

• suggests the implementation of a revenue sharing mechanism. This mechanism would likely require cooperation and agreements between countries to distribute tax revenues appropriately;

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Additional information:

- EESC section: Economic and Monetary Union and Economic and Social Cohesion (ECO)

- opinion type: Own-initiative Opinion

- rapporteur: Krister ANDERSSON (Employers - GR I Sweden)

- reference: ECO/613-EESC-2023-00860

- referral: N/A

- date of adoption by section: 02/02/2024

- date of adoption in plenary: 20-21/03/2024

Contact:

Thomas Kersten

Press Officer

Tel.: +32 (0) 2 546 8931

Email: thomas.kersten@eesc.europa.eu

Jüri Soosaar

Policy Officer

Tel.: +32 (0) 2 546 9628

Email: eco@eesc.europa.eu