Remote working can also give rise to VAT issues. Companies will need to consider whether remote workers could give the business a fixed establishment for VAT purposes. A fixed establishment is the sufficiently permanent presence of human and technical resources that allow you to carry on a business from that location. Whether you have a fixed establishment will depend on the nature and number of employees working from a given country and the nature of your business. The more independence that those remote workers have the greater the risk of a fixed establishment.
Having a fixed establishment in another country could mean that services provided from that fixed establishment are subject to VAT in that country, with associated foreign VAT registration requirements. It could also mean that there are VAT accounting obligations in relation to purchases made by that establishment. These new accounting and reporting obligations also have knock on systems requirements to ensure that the data is available to accurately meet the new compliance requirements
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