Mobile Workforce Tax Risk: Why Employee Authority Matters

David Brandon
Attorney, Tax

Abstract
As remote work and cross-border mobility become more common, companies face new tax questions about where employees work and what they are authorized to do. David Brandon, a tax partner in the Boise office, explains that a mobile workforce is not automatically high risk—but the details of each employee’s role can significantly affect the tax outcome.

The discussion focuses on how activities such as pursuing sales contracts, hiring distributors, or making decisions in another country can create different tax consequences. For legal and business leaders, the key takeaway is that clear authority lines, documented affiliate agreements, and proactive employee guidance can turn potentially high-risk activity into manageable risk through good corporate hygiene.

Transcript
I am David Brandon. I'm a tax partner in our Boise office, and my practice is focused on tax planning, so I'm usually involved with planning the consequences of significant transactions for businesses. One of the most interesting thing that's been happening in the last, I'd say six or seven years, and really started with the pandemic when people started moving remotely, is a lot of companies have to deal with a mobile workforce. If you have workers that are moving from country to country to country, that by itself may not be a high risk scenario for you, but it really is a question of what are they doing. For, just quick example, if you as a company send a salesperson into another country and tell them, go forth, test the market, get a bunch of sales contracts for us, or on the other hand, go and hire a distributor to do the same function but localized within that country, those are two very distinct tax results. The answer to the question of when does this move from low risk to high risk is very nuanced, and the answer is going to be very dependent on what are the individuals doing? What do they have authority to do, and how are they operating within the whole of your company? What we like to tell our clients and what we found works very well, is to have conversations with your employees beforehand, help them understand what they can and cannot do. Have clear lines of sight for authority, for decision-making, contracting, document your agreements with your affiliates in other countries. Good corporate hygiene is really the factor that changes a high risk activity for a company into a low risk activity.