The Organisation for Economic Co-operation and Development (OECD) has floated a discussion paper to assess tax-related issues that arise in connection with the global mobility of individuals
The document, titled 'Global Mobility of Individuals', released last week, focuses on the tax opportunities and concerns brought about by a growth in remote and cross-border activity.
Experts say the document is “highly relevant” for India as a large share of India’s workforce is engaged in global roles, such as IT services, consulting, Global Capability Centres (GCC) projects, etc.
They say, at present, many Indians, by virtue of working across borders, are at times required to pay double taxation, for which concrete rules need to be made.
To be sure, the paper only intends to gather data and information from stakeholders in order to better understand the scope and geographical variations of tax-related issues associated with global mobility, before setting any guidelines for the future – which are expected to be out by end-2026.
A separate report of OECD, named 'International Migration Outlook 2025', said that, in 2023, nearly 600,000 Indians migrated to OECD countries — an 8 percent increase over the previous year — making India the top-origin country for new migrants.
The movement reflects a broader shift: global migration is no longer dominated by low-wage labour but by skilled and semi-skilled professionals from emerging economies, led by India, highlighted the report.
Tax-related issues
The paper highlights that, in many jurisdictions, individuals are liable to be taxed on their worldwide income in the jurisdiction of which they are a resident. When an individual is engaged in a form of cross-border work, the application of domestic law in different jurisdictions may mean that an individual is a tax resident of more than one jurisdiction.
In an arrangement where an individual works in a jurisdiction which is different to that in which the employer is located may also present tax and administrative challenges to the individual and/or employer.
For example, when an individual works in both the jurisdiction of which they are a resident and a different jurisdiction of which his employer is a resident, the individual may have a tax liability in each jurisdiction and therefore may have to file tax returns in both jurisdictions.
There may also be different rules in different jurisdictions for taxing other forms of employee compensation, such as employee share schemes. The differences in treatment may result in complexity and/or double taxation in the case of global mobility.
The paper also seeks guidance on taxability when a remote employee's home office may constitute a Permanent Establishment (PE) for their foreign employer, which could trigger a corporate tax liability (of the employer) in the employee's country of residence.
Experts’ take
With technology enabling employees to work from anywhere, the current rules on tax residency, allocation of employment income, withholding obligations, and treatment of share-based compensation are becoming complex and pose double-taxation risks, say experts.
The OECD consultation paper recognises these personal tax issues along with corporate tax challenges - especially whether remote employees create a permanent establishment (PE), whether virtual participation by senior management affects the company’s tax residence, and how profits should be attributed when key functions are spread across countries, they say.
“When Indian employees split workdays across jurisdictions or deliver services remotely to foreign companies, Indian residency rules and treaty provisions often clash with the tax rules of other countries. This can lead to dual residency issues, double taxation, filing requirements in multiple countries, and questions on whether the foreign employer has a PE in India,” explained Amit Maheshwari, Tax Partner, AKM Global.
“Also, a senior executive attending virtual board meetings from another jurisdiction could inadvertently shift a company’s tax residence. These issues are becoming common, so clearer international guidance will help reduce disputes and compliance burdens,” said Maheshwari.
Jitendra Jain, Partner, Price Waterhouse & Co, said that India plays a dual role in the global workforce, both sending talent abroad and attracting professionals from other countries. "As a member of the OECD-G20 Inclusive Framework, India is actively engaged in international tax discussions. This consultation is a chance for India to share its experiences and help shape global tax policy in a way that reflects the realities faced by Indian taxpayers and businesses."
Nitin Narang, Partner, Nangia & Co, said: "Though Indian companies may benefit by getting access to a global talent pool and potential economic advantages, challenges, such as navigating complex tax laws for both individuals and employers, managing regulatory scrutiny, the risk of double taxation, increasingly complex transfer-pricing fact patterns , would need to be navigated through."
"With global mobility on one side and GCCs, on the other, Indian skilled workers may find themselves at the crossroads," Narang added.
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