Home office of employees as permanent establishment for foreign companies?

Non-resident companies might be subject to Austrian corporate income tax if they set-up an Austrian permanent establishment here. In this respect also the home-office of an employee of the foreign company may qualify as a permanent establishment under certain circumstances. Therefore, the Austrian Federal Ministry of Finance has issued new guidelines on May 22, 2020 that home-office work of an employee in Austria for a foreign company does not lead to a permanent establishment of the foreign company in Austria in the course of current pandemic. As a rule, the home office work results from force majeure und lacks the required consistency. In addition, the foreign company will likely not have the necessary authority to dispose over the home office that would be required for creating a permanent establishment and the employer will regularly give the employee the possibility to use an office space of the employer, even if he cannot use it during the pandemic. Limitations to these guidelines apply if the home office work would lead to a permanent establishment irrespective of the current pandemic situation or if home-office work becomes the regular way of working.

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