Home office abroad for German employers: opportunities, challenges and legal aspects

Modern ways of working, such as desk sharing, remote work or flex office, are becoming more and more important. But so is the option of working from a home office. An increasing number of employees also want to work abroad for their German employer. At first glance, the advantages seem convincing: flexibility, cultural diversity and the opportunity to combine work and travel. But what legal, tax and organizational conditions need to be considered? This article highlights these and other important aspects of this topic.

Legal and tax framework

Working abroad for a German employer entails many legal and tax challenges. To avoid problems, it is therefore essential to carefully examine the relevant regulations! Three aspects are particularly important here: labor law, tax consequences and social security.

1. Labor Law

German labor law also applies abroad, provided that the employment contract was concluded in Germany. It provides the legal framework for issues such as

• working hours,
• protection against dismissal or
• holiday entitlement
  

. In some countries, however, additional local laws may apply that employees and employers must observe. For example, reporting requirements or country-specific regulations on occupational safety may apply. Clear agreements and precise documentation are therefore crucial to avoid misunderstandings or legal disputes.

2. Tax consequences

Within the EU, there are no uniform rules for the tax aspects of working abroad. The tax treatment depends primarily on the duration of the stay and the country in which the work is carried out. If the stay is shorter than 183 days and the salary is paid directly by a German company without the company having a permanent establishment in the country of employment, the tax liability generally remains in Germany. However, the prerequisite for this is that the employee continues to be resident in Germany.

3. Social security

The social security obligations for temporary work in a home office abroad depend on two factors: the duration of the stay and the location of the destination country, whether inside or outside the EU.

• Within the EU: If the employee is working from home for more than three months, the social security regulations of the host country apply. An exception to this is if the employer sends the employee to a country in which it has a branch for up to 24 months. However, the A1 certificate should always be carried to prove the applicable social security law. Residence permits are not required, but local reporting requirements must be observed.
  
• Outside the EU: In this case, different social security regulations apply depending on the agreement between Germany and the destination country. Employees require a residence and work permit for this, which can usually be easily applied for online. Furthermore, a careful examination of the requirements before the stay is essential to avoid legal problems.

In summary, it can be said that home office abroad for a German employer requires thorough preparation and coordination between the parties involved.

Additional agreements to the employment contract

In order to clearly and bindingly define all important points for the home office abroad, an addition to the existing employment contract is recommended. Such an additional agreement should particularly take into account the following 5 aspects:

1. Availability: How and when should the availability of the employee in the home office be ensured?
2. Time limit: How long is the work abroad limited in time?
3. Cost regulation: What costs arise from the home office abroad, and who covers which expenses?
4. Tax and social security issues: What legal obligations must be fulfilled in the destination country and in Germany?
5. Return obligation: Under what circumstances and conditions will it be necessary to return to the office or to Germany?
   

This agreement ensures transparency and provides security for both parties by avoiding potential misunderstandings or conflicts in advance.

How long can employees work from home abroad?

How long employees can work from home abroad essentially depends on the individual agreements between employer and employee. Both operational requirements and corporate structure play a central role here. In many cases, employers have the option of being flexible about the length of the stay. At the same time, the permissible duration depends heavily on the destination country, as different visa requirements must be observed. In addition, longer stays may result in tax and social security obligations in the country of residence, which can lead to additional legal and financial obligations. The question of how long it is possible to do without personal contact should also be carefully considered. After all, regular meetings and personal interaction can be crucial for team dynamics and workflows, despite the advantages of a teleworking job.

Working from home permanently from abroad: What to bear in mind!

If employees wish to work from abroad permanently, the situation becomes even more complex from a legal and tax perspective. This is because both the usual place of work and the focus of the employment relationship move abroad. In such cases, a choice of law or an additional agreement under German labor law is usually not sufficient, since the regulations of the country of employment carry more weight. In order to reduce the administrative burden, some companies use the option of employing employees as independent contractors via an agreement. In this model, the employees are managed as freelancers and are no longer regularly employed. However, this means that the company loses all authority to issue instructions. In addition, it must be checked whether the activity could be classified as bogus self-employment in the country of employment, which can have legal consequences. In addition, a comprehensive analysis should be carried out to determine what other obligations and risks are associated with such a constellation for the employer.

Advantages of working from home abroad

Working from home abroad is becoming increasingly popular and offers exciting opportunities for both employees and employers. In addition to flexibility, it opens up new possibilities for combining work and personal interests while making corporate structures more efficient.

For employees

home office abroad offers employees numerous advantages that go beyond traditional working from home.

• Flexibility and quality of life: Working from the beach or an idyllic mountain hut can significantly improve your work-life balance.
• Combining travel and work: Digital nomads in particular use home offices to discover the world without neglecting their professional obligations.
• Cost savings: In some countries, the cost of living is significantly lower than in Germany.

For employers

However, this way of working not only offers advantages for employees, but can also be of strategic value for employers. It opens up new opportunities to increase attractiveness as an employer and at the same time create competitive advantages.

• Employee satisfaction: The possibility of using a home office abroad can be an attractive benefit and strengthen loyalty to the company.
• Broader talent pool: Companies can access global talent through flexible working models.
  
• Cost efficiency: A smaller office space requirement can lead to long-term savings.
  

With careful planning and clear rules, these advantages can be optimally utilized by both employees and German employers.

Challenges and risks

Although working from home offers many advantages abroad, it is not without challenges. Accordingly, all parties should be aware of the possible risks in order to avoid legal, technical and organizational problems.

Labor law issues: Conflicts may arise due to different national laws, particularly in the event of termination or illness.

Technical hurdles: The IT infrastructure must be stable and secure. Time differences can also make collaboration more difficult.

Team dynamics: Extended absences can affect personal relationships within the team.

However, careful planning, clear agreements and consideration of these potential obstacles can minimize many risks.

Remote working abroad: seizing opportunities, overcoming challenges

For both employees and employers, remote working abroad offers numerous opportunities: more flexibility, increased employee satisfaction, global talent and potential cost savings. At the same time, however, it requires careful planning to overcome legal, tax and organizational challenges such as double taxation, labor law conflicts or team dynamics. With clear agreements and compliance with country-specific regulations, companies and employees can take advantage of this model and successfully implement modern, future-oriented ways of working.

Please note: Our content is intended solely for the purpose of providing information and does not constitute legal or tax advice. All content is compiled with the utmost care. However, it does not replace binding advice and does not claim to be correct or complete. No liability is accepted. For individual advice, please contact a lawyer or tax advisor.