The Impact of Remote Work on the Concept of ‘Permanent Establishment’

Abstract

With the continuance of the remote working trend post the coronavirus disease, the traditional notion of ‘physical presence’ can be blurred, it is thus important to discuss how the tax principles applicable to the concept of ‘permanent establishment’ will be applied to remote workers. This research report investigates whether the presence or activities of a remote worker in South Africa are at risk of creating a permanent establishment in South Africa for a non- resident entity. This research report further examines whether the current permanent establishment concept in South Africa is sufficiently robust, and flexible, to accommodate challenges presented by remote work. To the extent that the South African concept is deficient, this research report will make recommendations regarding how it should be developed.