New Developments of Tax Rules on Employment Income of Cross-Border Remote Workers and China's Response
In the cross-border remote work model,the application of traditional employment income tax rules will lead to the loss of tax benefits of the country where the employer is located.In terms of the tax burden of taxpayers,in the case of obtaining the same taxable income,the tax burden borne by cross-border remote workers as non-tax residents in the employer's country is also lighter than that of tax residents in that country,and this tax result may violate the principle of tax fairness.In response to the impact of cross-border remote work on traditional taxing rules of employment income,the UN Model,the France-Switzerland Tax Treaty and the domestic tax law of Russia,based on close economic connections,are innovatively proposing to grant the employer's country tax jurisdiction over the income of cross-border remote work in different ways,and balancing the tax benefits of the employer's country and the employee's resident country through tax credit or compensation.China can improve the tax rules of employment income from cross-border remote work in tax treaties,and modify the rules of source of income,special tax exemption rules and tax credit rules in domestic tax law,allowing the employer's country to exercise the source jurisdiction on the income of cross-border remote work and grant tax credit accordingly.
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