Micro-PEs and Global Mobility Risk Management

This article is a technical report that discusses the implications of micro-permanent establishments (micro-PEs) in the context of global mobility and taxation. It outlines how the proliferation of global workforce activity is creating new risks for companies as tax regulators begin to address compliance burdens associated with micro-PEs. The report details various approaches companies are taking to engage talent internationally, including remote work and the use of Employers of Record (EORs). It highlights the historical context of tax treaties, particularly the OECD model double tax treaty, and how its provisions have evolved since 1963 to address contemporary workforce issues. The article also examines the challenges faced by start-ups and mid-sized businesses in managing corporate tax compliance in multiple jurisdictions, emphasizing the potential for tax exposure and compliance obligations arising from micro-PEs. The report concludes with a discussion on the OECD's Mobile Workforce workstream, which aims to provide solutions for managing these risks effectively.