Rethinking Global Mobility: Insights from the OECD’s 2026 consultation

This stakeholder meeting explored how today’s tax rules interact with modern cross-border working. What made the discussion particularly valuable was the breadth of perspectives in the room: policymakers and academics focused on principles and coherence, advisers focused on technical application and risk, and tax professionals and industry experts focused on what can actually be implemented at scale without disrupting operations.

A key observation from the day is that ‘global mobility’ is no longer a specialist topic that sits neatly with expatriate tax teams. It is increasingly a strategic risk and enablement issue that reaches deep into the organisation. For many employers, it is now inseparable from broader questions around talent strategy, cost management, workforce design, and operating model decisions. This is why mobility is (or will become) firmly on the agenda for Heads of Tax and why we are seeing closer and deeper engagement between Tax, HR, Global Mobility, Payroll, Finance and Legal than just a few years ago.

It was also encouraging to see ‘global mobility’ being defined more broadly than in the past. Historically, mobility was often framed through the lens of structured, employer-led assignments with relocation packages, defined start and end dates, and a predictable compliance footprint. That model still exists, but it is no longer the only model. Today’s workforce includes permanent remote work arrangements, cross-border hybrid patterns, ‘work from anywhere’ flexibility, and an increasingly diverse set of working styles that blur the line between travel, remote work, and temporary mobility. Many organisations are now managing populations where individuals may never relocate formally but still work cross-border for meaningful periods of time. Mobility has become both more distributed and more continuous, and that materially changes the risk landscape. This is the era of non-traditional global mobility.  Key messages from the consultation included:

Lack of clear definitions for modern work patterns

The reality is that concepts like ‘remote work,’ ‘hybrid work,’ ‘business travel,’ ‘temporary presence,’ and ‘work from anywhere’ do not have universally accepted definitions in tax legislation. Even within the same jurisdiction, different rules may apply different terminology or interpret the same concept differently depending on context. If terminology is unclear, the compliance obligations become difficult to define. The employer cannot build a scalable policy, the employee can’t understand their personal exposure, and payroll teams cannot apply withholding consistently. When a rule is hard to interpret, it becomes even harder to administer at scale across a multinational workforce.

Mobility tax now spans multiple, mis-aligned tax domains

When people think about mobility tax, many default to the individual tax filing experience (residency status, payroll withholding, treaty relief etc.). However, mobility now touches transfer pricing, corporate tax, and permanent establishment (PE) exposure, as well as cross-border issues like payroll withholding, reporting obligations, and social security. Each of these areas brings its own body of rules and its own thresholds, and they often do not align neatly with one another.

The emergence of ‘micro‑PEs’ and fragmented corporate footprints

A business might historically have assessed PE risk when opening offices, appointing local leadership, or deploying long-term staff into a new market. But with modern mobility, PE risk can emerge in much smaller and more fragmented ways.

The meeting highlighted the growing challenge of so-called ‘micro-PEs’ where the company’s footprint in a country is not defined by a formal presence, but by repeated patterns of activity. Small numbers of days, repeated across multiple employees, can create a cumulative risk profile that begins to resemble an ongoing business presence. This is particularly relevant where employees carry out key revenue-generating or decision-making activities on the ground, or where they create a stable operating pattern, such as always working from the same client site or co-working space. Even if no one individual feels ‘based’ there, the combined footprint can become difficult to defend.

Transfer pricing challenges in a fluid mobility environment

Mobility frequently involves intercompany arrangements focused on cost recharges, management fees, service agreements, secondment structures, or project-based allocations. The reality is determining ‘who benefits’ from the work, where the value is created, and who should bear the costs can be contentious even in stable environments. When mobility becomes fluid, those questions become harder. If an employee is working remotely across borders for a team in another country, which entity is the true economic employer? Which entity should bear the cost? If key decision makers contributing to value-driving activities are internationally mobile, how does this impact the transfer pricing model and profit allocation across jurisdictions? Are the charges consistent with the organisation’s transfer pricing policy and documentation?

A change in how costs are allocated can also affect treaty outcomes in some jurisdictions, because ‘who bears the remuneration’ can be a key test in determining whether the source country has taxing rights. In practice, the mobility programme is often being asked to operate at the intersection of personal tax and corporate tax rules that were not designed to operate together seamlessly.

Changes in the locations of personnel can have implications for business operating models and supply chains – these need to be examined from a VAT/indirect tax perspective alongside assessing the impact of any changes made to the organisation’s transfer pricing policy.

Increasing employer obligations amid limited visibility

Many cross-border tax rules impose obligations on employers to withhold and report where employees work, sometimes from the very first day. Employers often do not have complete information about where work is being performed, especially in environments where travel is informal, remote work is flexible, or where employees make location decisions without central approval. This creates an inherent compliance gap even where employers have strong policies, enforcing them can be difficult when the business prioritises responsiveness, speed, and flexibility. The administrative burden grows quickly when there are multiple jurisdictions involved, each with different thresholds and documentation requirements.

Global threshold inconsistencies and operational challenges

One practical example discussed during the day was the inconsistency of thresholds globally. Some regimes refer to the number of days spent in-country, others focus on a rolling 12-month period, and some introduce percentage-based tests tied to working time. In the social security sphere, thresholds such as 25% or 50% of working time can become highly relevant, and these thresholds do not necessarily line up with income tax rules. The result is a patchwork of compliance triggers that are almost impossible to communicate cleanly to employees or administer consistently in payroll systems without dedicated tracking and controls.

Employers may attempt to implement internal ‘safe’ thresholds (for example, limiting days worked in certain countries), but these internal guardrails can give a false sense of security if they do not align to legal sourcing rules or if they fail to account for corporate tax/PE considerations.

Misalignment between tax and social security systems

In practice, employers and employees often assume that if income tax is not due in a country, social security will follow a similar logic or that if an A1 certificate or totalisation coverage applies, income tax exposure will be reduced. These systems frequently operate independently, and they are grounded in different policy objectives. Income tax treaties focus on preventing double taxation and allocating taxing rights, while social security rules are often designed to ensure people remain covered and contributions are allocated correctly. The lack of alignment creates confusion for employees and compliance risk for employers, particularly where the systems apply different definitions of ‘residence,’ ‘employment,’ or ‘place of work.’

Residence rules remain complex, inconsistent, and often retrospective

The interaction between domestic residence rules and treaty tiebreakers is conceptually understood by specialists, but it remains difficult to operationalise in the real world when individuals move frequently or maintain meaningful connections in multiple jurisdictions. In many cases, the individual’s residence position becomes a compliance puzzle that can only be resolved retrospectively once full-year facts are known. The timing mismatch between real-time payroll and withholding decisions versus retrospective residence analysis is a major practical problem in modern mobility and managing risk.

Divergent approaches to economic vs. formal employer concepts

Another challenge that surfaced repeatedly is the ‘economic employer’ versus ‘formal employer’ concept. Some jurisdictions apply economic employer principles more assertively, focusing on who directs and benefits from the employee’s work rather than simply who issues the employment contract and pays wages. The lack of global consistency creates a difficult compliance environment, particularly for matrix-managed organisations where reporting lines, budget ownership and project control may span multiple jurisdictions. In practice, the same fact pattern can lead to quite different conclusions depending on where the employee works and how local authorities interpret economic substance.

Business demand for mobility vs. compliance constraints

These complexities are not simply technical points as companies want to compete for talent, hire remotely, enable flexibility, and support employees in working across borders. Employees increasingly expect mobility options as a standard part of employment but without scalable frameworks, the burden of compliance can become disproportionate causing businesses to restrict mobility even where commercial demand exists, or to accept unmanaged risk simply because tracking and compliance processes cannot keep pace.

Conclusion

A push for simplification, coordination and administrability

This is not about lowering standards or removing tax rights, it is about creating rules that reflect how work happens today and that can be implemented without excessive cost and uncertainty. Discussions around potential treaty updates, the introduction of safe harbour frameworks, and certification mechanisms all point toward a desire to provide clarity and reduce friction. Safe harbours, if designed carefully, could help employers manage lower-risk scenarios without intensive analysis for every employee movement. Certification frameworks could support clearer sourcing positions and reduce disputes between jurisdictions. And most importantly, clearer definitions and aligned terminology would give employers a foundation for building consistent global policies and tracking systems.

The need for coherent, modern frameworks to support remote work

Remote work is here to stay. The meeting reinforced that the conversation is moving in the right direction, but it also underscored how much work remains to create solutions that are both technically robust and operationally workable.

For employers, the challenge will be to balance flexibility and competitiveness with compliance and risk management. For policymakers, the challenge will be to design frameworks that support cross-border work as a feature of the modern economy rather than treating it as an edge case.

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