22/01/21

IRELAND: Digital workers who locked down abroad ordered back to country as tech titans fear tax hit.

As published on independent.ie, Thursday 21 January, 2021.

Staff at some of the country’s biggest technology employers have been ordered back to Ireland and told working from home must be within the country.

Some staff say it’s left them under pressure to travel and find accommodation during one of the worst periods of the pandemic and even fearing for their jobs.

One big Dublin employer, global jobs platform Indeed, confirmed it told Irish based employees they needed to return here by January 1, but said it will be flexible where a return is delayed as a result of the pandemic or health concerns.

The dramatic increase in jobs that can be done remotely since the start of the pandemic has kicked off a surge in so-called ‘digital nomads’ – tech workers relocating from expensive cities like Dublin, London or San Francisco to cheaper places often with lifestyle benefits.

Traditionally peripheral countries like Greece and Barbados have even offered incentives in an effort to boost their tax bases by bringing in high-paid workers. In many cases, overseas workers returned to their home country for some or all of the duration of the crisis.

However, while self-employed or contract workers can work from anywhere, global tax planning means that is not the reality for many employees.

Economist Seamus Coffey of UCC says corporate tax rules mean multinationals have little choice but to keep employees within the jurisdiction where the profits from their work is taxed.

“There is no doubt tax is a significant factor. Companies pay tax on the basis of where they have operations. If a company was to have staff permanently based in different countries that could trigger it being found to have a taxable presence in each,” he said.

That is especially true if it involved staff who close big deals or create valuable intellectual property. In theory, firms could be forced to make tax returns in any place employees were working, including calculating the relevant profits to assign each worker.

In February last year, Indeed’s Dublin offices with more than 1,000 staff became the first big employer here to tell all of its staff to work from home to prevent a possible Covid-19 outbreak, setting a template that was followed within weeks by millions of workers.

Its Irish-based employees come from dozens of countries and some had returned home or gone elsewhere for some of the last 11 months.

The company confirmed to the Irish Independent that all staff continue to work remotely, but should be doing so within Ireland unless explicitly cleared to move abroad.

“Employees are able to live anywhere within their country of hire. Employees who wish to move to another country will be evaluated on a case-by-case basis. In relation to employees who returned to their home country during the Covid crisis, they were asked to return to their country of hire by January 1,” the company said.

“Where that hasn't been possible due to the public health situation, we are working with those employees on a case-by-case basis.”

Google, another technology giant and a near neighbour of Indeed in Dublin’s usually buzzing Grand Canal Docks area, has told employees that they can continue to work from home until September 2021, but that should be within Ireland for employees of its Irish arm.

Google is understood to see some scope for flexibility in light of the exceptional nature of the current crisis and the need of some Google staff to get back to their home country to be with partners, family or for other practical reasons.