Cross-border labor mobility can lead to (unforeseen) corporate tax liabilities, potentially resulting in company profits being taxed more than once. This can happen when an employee (inadvertently) creates a taxable presence in the host country. 

To recognize and flag this risk, one must first understand the basic principles of national and international taxation on corporate income.

To understand the concept of a permanent establishment, we reference the definitions within the OECD Model Tax Convention, as this is the most commonly used model for bilateral tax agreements. However, in practice, the specific content of tax treaties is determined by the involved countries and may deviate from the OECD Model.

A Dependent Agent PE is one of those deceptively simple concepts that is particularly relevant for short-term assignees and business travelers, as their activities may inadvertently create a taxable presence for corporate tax purposes in the host country.

Since the introduction of the BEPS Framework, the Permanent Establishment (PE) principle has garnered significant attention, extending beyond traditional corporate tax considerations. This is crucial because BEPS not only increases PE exposure but also affects the reporting obligations for all employees involved in cross-border activities.