Revising the Fiscal and Social Security Landscape of International Teleworkers in the Digital Age

H. Niesten*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


The challenges of digitalization - exacerbated by the COVID-19 crisis - provide an excellent case study in which the fiscal and social security landscape of international teleworkers can be subjected to a critical evaluation. This contribution discusses whether and how policymakers should consider adapting the longstanding tax and social security rules and principles for tele-employment to new working practices created by digital developments in a globalized economy. Various elements make the traditional assimilation of the source state to the (performance of) activity state no longer suitable to tackle the challenges in the digital economy. The special focus lies on a critical comprehensive, in-depth evaluation of the interpretation and application problems with regard to (1) the place of exercise of employment of international teleworkers for the allocation of taxing rights for employment income, (2) the creation of a permanent establishment for the employer by teleworking from home (i.e. home office) or contract conclusion in the homes of employees/agents, (3) the loss of personal and family tax benefits, and (4) the affiliated (dis)coordination between the tax allocation rules (double tax treaties) and the social security law rules (Regulation (EC) No 883/2004). These issues matter even more considering the tax implications and potential new burdens arising due to the economic effects of the COVID-19 pandemic crisis under which teleworking is - at least temporarily - the new normal. Suggestions are made regarding the tax jurisdiction over employment income of international teleworkers and effective coordination between fiscal and social security law.
Original languageEnglish
Pages (from-to)120-143
Number of pages24
Issue number2
Publication statusPublished - 1 Feb 2021


  • digitalization
  • discoordination between taxation
  • physical presence
  • social security
  • taxation
  • telework

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