According to Grover, some of the important factors in determining a shift of employment are as follows:
Whether the employee’s reporting and remuneration clearly shifted to the host country entity;
Whether the employee’s role & responsibilities, reporting manager etc are with the entity in host country and whether these are clearly stated in the letter issued to him by entity in host country?
Whether the employee traveled on work visa;
Whether any part of the employee’s duties included services the for home country entity;
Whether the employee is involved in any contract discussions; If yes, are those contracts for the entity in the host country?
“Tax authorities in many countries including, India, China, Japan, Korea, Taiwan and Brazil are quite focused these days on PE issues and more specifically on service PE issues,” Grover said.
