OECD Consultation on the Global Mobility of Individuals: our response

The COVID-19 pandemic has fundamentally altered work patterns, with remote and hybrid working arrangements now a permanent fixture in many organisations. Our response notes that service-based and technology-driven sectors, in particular, have embraced cross-border remote work, and based on the findings of the 2025 KPMG Global Mobility Benchmarking Report this trend is expected to persist. However, this newfound flexibility brings with it a web of tax, social security and employment law complexities that can deter organisations from fully capitalising on global talent pools.

One of the most significant obstacles facing organisations is the patchwork of tax and social security obligations that arise when employees work across borders. We have observed that the lack of harmonisation between jurisdictions will, on occasions, lead to dual tax residency and double taxation risks for individuals. Current double tax treaties, while helpful, are sometimes insufficient to resolve these issues, especially when it comes to effective residency tiebreakers and the consistent treatment of employment income (including share-based remuneration and pension contributions in particular).

From a corporate perspective, whilst the recently published OECD commentary on remote work and fixed place Permanent Establishment (PE) risk has been helpful and welcome, PE risk and profit attribution remain a major concern. The rise of remote work has blurred traditional boundaries, making it difficult for organisations to determine when and where a PE is created, and how profits should be allocated. This uncertainty not only increases compliance costs but also exposes companies to potential disputes and double taxation.

Since the COVID-19 pandemic there has been greater pressure on multinational groups to accommodate more geographically dispersed leadership teams. It is increasingly common to see multinationals using a number of hub locations for global and regional management functions as well as allowing some flexibility for certain management roles to be located outside these hubs (or the specific jurisdiction of the operations to which they relate) to accommodate the personal circumstances of key talent. These trends further complicate the exercise of delineating and pricing intra-group transactions under existing OECD Transfer Pricing Guidelines. Our consultation response has highlighted that this complexity can lead to disputes between tax authorities and, ultimately, double taxation for multinational enterprises. The main areas of concern relate to inconsistent approaches by tax administrations to the relative importance of performance of functions (control and management of risks in particular) and ownership of assets; and a lack of consensus on the circumstances in which cross-border transfers of functions can give rise to exit charges.

To address these challenges, our response calls for continued efforts to harmonise and simplify tax rules across jurisdictions. Key recommendations include:

• Harmonisation of tax treatments: An alignment of rules governing pensions, social security contributions and share schemes wherever reasonably possible. Such harmonisation would reduce administrative burdens and provide greater certainty for both employers and employees;
• Simplified payroll and remote worker provisions: The introduction of streamlined payroll processes and special provisions for remote workers would help organisations manage cross-border employment more efficiently. Our response also suggests that the OECD might base future provisions for remote workers on terms which may be found in several treaties which attribute employment income taxing rights for frontier workers;
• Clearer guidance on PE threshold and profit attribution: Building on the recently published OECD commentary on fixed place PE and remote workers, we have asked the OECD to provide clearer, more practical guidance on the creation of PEs and the attribution of profits in the context of remote work. This includes the development of safe harbour provisions for so-called ‘micro-PEs’ which would limit administrative complexity and offer greater certainty to taxpayers and tax authorities alike;
• Transfer pricing: Consider simplified pricing approaches for management roles performed remotely from a jurisdiction on an isolated basis (i.e. lack of critical mass in that jurisdiction) and provide improved examples-based guidance on when cost plus would not be appropriate for remote workers with management responsibilities and the interaction with exit charges; and
• Improved dispute resolution mechanisms: Recognising the inevitability of cross-border disputes, our response recommends the streamlining and acceleration of dispute resolution processes. This could be achieved through the wider use of advance rulings and enhanced cooperation between tax authorities.

Despite the potential benefits of remote work, we have highlighted several concerns which would benefit from greater focus in 2026. Chief among these is the significant administrative burden associated with complying with diverse and often conflicting tax regulations. This complexity can lead to underreporting of remote work arrangements, increasing the risk of non-compliance and penalties.

Our response notes that the economic impact of remote work is complex and context-dependent. While some organisations report increased productivity and access to a broader talent pool, others - particularly in sectors such as financial services - are reverting to more traditional, office-based models. The long-term effects of remote work on job creation, wages and economic growth remain uncertain.

The adoption and impact of remote work varies significantly by region and industry. While some regions have embraced remote work, others face greater regulatory and logistical challenges. Similarly, certain sectors are more amenable to remote work than others, highlighting the need for tailored solutions rather than a one-size-fits-all approach.

Our response to the OECD consultation underscores a desire for clearer guidance, harmonised frameworks and simplified procedures to support international remote work. As businesses, individuals and tax professionals continue to grapple with the complexities of global mobility, cooperation between jurisdictions and proactive engagement with the evolution of the OECD’s consultation will be essential.

The next step will be a public consultation meeting to be held by the OECD on 20 January 2026, at which the various themes identified in the consultation paper will be discussed. For further updates as this workstream evolves during 2026, please get in touch with the authors or your usual KPMG point of contact.

For further information please contact:

• Phil Roper
• Mike Lavan