The Belgian and Dutch authorities published an agreement on 12 December 2023 clarifying how to deal with teleworking employees, which could lead to the existence of a permanent establishment, taxable in the home country of the employees.


The agreement describes the following possibilities: 

Incidental working from home
In the case of an employee who works from home irregularly or occasionally, where working from home is not part of the regular work pattern, there is no reason to consider a permanent establishment. After all, in that case there is no question of a (place of work) that is at the disposal of the employer's enterprise, because, in short, the continuity required for this is lacking.

Structural working from home with the possibility of working on location
When working from home is part of a fixed work pattern, there could be a situation where the home workplace is at the disposal of the employer's company.

If an employee structurally works from home in his state of residence, while he can also choose to work at the workplace available in the state in which the employer is located, in principle there will be no permanent establishment. This is because, in this case, the employer does not require this individual employee to perform his work at his home-based workplace and the home-based workplace is not available to the employer's business.

However, if a home office is continuously used for the performance of the employer's business activities and it is clear from the facts and circumstances that the employer requires this individual employee to perform the business activities from the home office, then the home office may be at the disposal of the employer's business. 

This is a factual test, this means, for example, that a home office may be at the disposal of the employer's enterprise when the facts show that in practice it is intended that the workplace available in the state in which the employer is located will not be used by the employee much, if at all, because in fact the employer requires that the employee must perform the employer's business activities from the home office in his state of residence.

Structural and mandatory home working
If the home office from which an employee works from home on a structural basis is at the disposal of the employer's enterprise, a permanent establishment may exist. The assessment of whether a home work location is at the disposal of the employer's enterprise is a question of fact.

Whether a location is available to an enterprise in such a way that it can constitute a business facility by means of which all or part of the activities of an enterprise are carried on will depend on whether the employer has actual power to use the workplace and whether the employer can actually determine the extent to which the enterprise is present at that location and whether it can determine the activities that can be carried on there. 

The foregoing should be tested at the level of an individual employee. Thus, it is irrelevant how much, on average, an employer's employees work from home and whether a workplace at the employer's location is made available for each employee at all times. Equally irrelevant is whether or not the employer has provided resources to set up the home office to enable home working.

Practical application
According to this agreement, "occasional teleworking" (less than 50% of working time over a 12-month period) will in principle not give rise to a material permanent establishment. 

However, if telecommuting becomes structural in nature, for example if an employee spends more than 50% of his working time at home, this could affect the employer's tax status. Everything depends on the existence of a real option to work from an office offered by the foreign employer and the regularity of exercising this option.

If the employee works from home on a voluntary basis, this situation will generally not be considered as the provision of a home office by the foreign employer.


It is important to note that the agreement focuses on the qualification of the home workplace as a material permanent establishment and does not deal with the permanent establishment resulting from the presence of a dependent agent. 


If you have any questions regarding this topic, don’t hesitate to contact our RSM Belgium | Tax team ([email protected]).