Remote work from abroad and the new OECD update – key implications for employees and employers in Poland

Remote work from abroad has become a standard feature of today’s labour market. “Work from anywhere” models, temporary relocations, extended private stays combined with day-to-day duties, and foreign home offices are now common — for employees and employers alike. From a Polish tax perspective, this trend increases complexity and can create new exposure, particularly around permanent establishment, employment income taxation, and corporate obligations under Polish Corporate Income Tax (CIT) and Personal Income Tax (PIT) rules.

One of the key reference points for assessing these risks is the OECD’s updated Commentary to the OECD Model Tax Convention, published in November 2025, which for the first time addresses remote work from abroad in a broad and practical way. While the OECD Commentary is not “law”, it is frequently used to interpret double taxation agreements (DTAs) and treaty concepts — also in Poland.

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OECD 2025 guidance: why it matters for employers in Poland

The Organisation for Economic Co-operation and Development (OECD) updated the Commentary with a focus on Article 5 — the treaty definition of a permanent establishment (PE). The update reflects how modern business operates today:

• work is no longer tied to a single office location,
• employees perform duties from multiple countries,
• the line between “private stay” and “business presence” is increasingly blurred.

Importantly, the update does not rewrite Article 5. Instead, it meaningfully reshapes how tax authorities may interpret it in real-life remote work scenarios — moving away from a purely formal approach and towards the actual operating model and the economic role of work performed abroad.

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What is a permanent establishment under the OECD approach?

Under Article 5 OECD Model Convention principles, a permanent establishment generally exists when a business carries on activity through a fixed place of business that:

• has a certain level of permanence,
• is at the disposal of the enterprise,
• is used to perform a material part of business activity,
• is not limited to preparatory or auxiliary functions.

The 2025 OECD Commentary makes it clear that an employee’s home office can, in certain circumstances, meet these conditions. That said, it does not mean that every instance of remote work from abroad automatically creates a PE.

The key question becomes: why and how the work is being performed from that country.

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Remote work from abroad: when can PE risk arise?

Time threshold: “50%” as a signal, not an automatic rule

The OECD introduces an indicative reference point: around 50% of working time over a 12-month period may suggest that a deeper analysis is required. Crossing this level is not a PE “trigger” by itself — but it may increase scrutiny and highlight potential exposure.

Short-term, incidental remote work abroad — such as during holidays or a family visit — should generally not create a PE.

Business rationale: the main driver of higher risk

A major shift in the OECD’s approach is the emphasis on the commercial reason for an employee’s presence in a given country. PE risk typically rises when the employee’s location abroad:

• results from business needs of the employer,
• brings measurable business value to the enterprise,
• supports a local market or local customers,
• enables operations in a specific time zone as part of the business model.

Particularly sensitive roles include:

• sales and business development,
• negotiation and contracting,
• management and decision-making functions,
• key operational roles tied to revenue generation.

If remote work from abroad is driven purely by personal reasons (lifestyle choice, family situation) and the employer does not benefit commercially from the employee being in that country, the PE risk may be significantly lower — even where the stay is longer.

OECD examples: same number of days, different outcomes

The updated OECD guidance illustrates the above with practical examples:

• An employee works from a foreign home office for 60% of the time, has no local customer contact, and there is no business justification for the location → no PE is created.
• The same 60% work pattern may contribute to a PE risk if the employee regularly meets local clients, supports the local market, or performs a function that is crucial to the enterprise’s business model.

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Foreign home office and taxation of the employee’s salary

The 2025 update also reinforces how tax treaty principles apply to employment income earned through cross-border remote work.

From a Polish PIT and treaty perspective, a key factor is typically the place where the work is physically performed — not:

• where the employer is registered,
• where the contract was signed,
• or what the employee assumes their tax residence to be.

Key takeaways for employers:

• the country where work is physically carried out may claim taxing rights over employment income,
• the 183-day rule remains relevant, but is increasingly monitored in practice,
• if duties are performed “for” a permanent establishment in a given country, taxation risk may arise regardless of day count,
• companies should be able to evidence the real place of work (actual work location), not only HR declarations.

In practice, this means employers with operations in Poland should align remote work policies with DTA (double taxation agreement) rules applicable to the employee’s situation and ensure internal tracking is good enough to support payroll and tax positions.

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Corporate consequences: CIT and beyond

If a remote worker’s activity abroad is treated as creating (or contributing to) a permanent establishment, the consequences for the enterprise may include:

• attributing a portion of income to the PE,
• maintaining local tax records for PE purposes,
• filing CIT returns in another country,
• potential VAT implications (depending on the facts and local rules),
• higher audit and tax authority scrutiny.

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What should employers do in Poland?

The OECD update sends a clear message: lack of formal rules for remote work from abroad can lead to uncontrolled tax consequences.

Recommended actions typically include:

• assessing whether a foreign home office arrangement could create a PE,
• identifying key, profit-generating functions performed abroad,
• monitoring employees’ cross-border stays and work patterns,
• implementing internal reporting of work location (beyond “where the employee is travelling”),
• updating mobility and “work from anywhere” policies,
• reassessing potential impacts across CIT, PIT, VAT and transfer pricing.

A robust remote work-from-abroad policy should address, for example:

• notification and approval rules for working from another country,
• acceptable duration thresholds (and escalation rules),
• which duties are permitted abroad (and which are restricted),
• employee reporting obligations,
• internal tax and social security risk checks.

If you need support with assessing PE exposure and employer obligations under Polish tax rules and DTAs, consider involving tax advisory in Poland early especially when remote work becomes recurring rather than incidental.

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A new perspective on workforce mobility

The OECD’s November 2025 update does not introduce new binding tax rules. However, it changes how well-known treaty concepts may be applied to modern work models. Tax outcomes increasingly follow the reality of where work is performed, not only the employer’s registered office.

For employers operating in Poland, this means mobility management and permanent establishment risk need to be handled proactively — often by verifying legacy assumptions and updating internal frameworks in line with the OECD’s newer interpretative approach.

It is also worth remembering that each case of remote work from abroad requires an individual assessment that takes into account local tax rules and the provisions of applicable double taxation agreements (DTAs). The OECD Commentary is an interpretative guideline — it does not replace an analysis of the specific facts of a given situation.

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If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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