Taxation of employees in cross-border operations

An employee of an Estonian company abroad and an employee of a foreign company in Estonia

In an ever-globalizing world, employers must pay special attention to the taxation of cross-border employees.

  • Comprehensive advice on wage accounting, social insurance, and personal income tax
  • Evaluation of the risk of taxation of outbound business trips and employment relations in the country of origin and the country of destination- both from the employer’s and the employee’s perspective
  • Global mobility services
  • Ascertainment of tax residency and performance of the required registration procedures

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Even though the Estonian law does not provide a definition of a short-term or long-term business trip, the duration of the business trip must be taken into consideration for the purposes of both income tax and social tax.

  • When should the employer apply for A1 certificate from the Social Insurance Board?
  • When does the employee’s tax residency change and how to appropriately account for it?
  • How to calculate taxes on wages paid to employees sent on long-term business trips?
  • What kind of corporate income tax risks are involved in long-term business trips and existing employment contract?
  • Which tax liabilities and tax incentives are applied to employees working in a foreign country?

The issues related to taxation of expatriate employees are equally important:

  • When should an expatriate employer register as a taxpayer in Estonia?
  • How to compensate for the costs borne by the expatriate employee?
  • Which additional registrations are required for an expatriate employee in Estonia?

Our goal is to provide a comprehensive support and ensure compliance with the requirements established for both employees of resident and non-resident employers.

The tax and legal advisers of Grant Thornton are at your service in all of employment related matters and will provide assistance in any other issues that may arise with respect to cross-border employment.

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