Tax will be a snag for employees who wish to work remotely from another country

A new Eurofound report says the shift to remote work will continue across the EU, and national authorities and firms will have to play catchup when it comes to issues such as tax. Stock picture

Countries and companies face having to work out complex tax issues in the coming years as remote working is likely to see employees wanting to live in one EU country while working in another.

That is one of the findings of a report on the evolving nature of remote working since the pandemic began published by the Dublin-based EU agency Eurofound, the European Foundation for the Improvement of Living and Working Conditions.

Only France, Lithuania, and Portugal currently have the right to request telework enshrined in legislation, with companies themselves largely the regulator of various policies, Eurofound said.

Ireland is among a number of countries where legislation is under discussion, with a code of practice being approved, the agency added.

The Covid-19 pandemic initially compelled millions of people to work from home, with a knock-on effect of people realising they enjoyed it far more without the likes of commuting and accommodation expenses to worry about.

Eurofound said the shift to remote work will continue across the EU in the coming years, with national authorities and companies having to play catchup when it comes to issues such as tax.

Anecdotal evidence suggests that many companies in Ireland have nixed requests from employees to spend weeks or even months in the likes of Spain or Portugal while continuing to work remotely as normal.

Tax barriers have been cited, with companies facing headaches trying to navigate differing financial obligations in other countries.

Eurofound said the challenge needs addressing sooner rather than later.

John Riordan, chairman of Grow Remote, which advocate for remote working, said current tax regulations make it “deeply problematic for somebody to up sticks, go to Spain, work for a month and come back” as there are a series of tax “landmines” in the way for companies.

“What the report very clearly said is that there is no one size fits all in terms of regulation,” he said. “What’s required here is a coordinated approach across the EU.” He said a “harmonisation of the way in which this is being approached from a legislative and a tax perspective would be beneficial to all European Union countries”.

Mr Riordan said the ultimate goal would be for jobs to be posted in a “location agnostic manner”.

“Roll the dice out 10 years and – done correctly – there will be the ability for people to actually take the body of work that they’re doing and live and work wherever they want in Europe,” he said adding Irish people won’t necessarily “flock to the sun” elsewhere in Europe, and many will stay as “we have a lot of infrastructure around the place that we come from”.

“From an Irish perspective, not only should we be welcoming this we should be championing this across the EU states,” he said.