14. May 2024 Even in office settings, alternative work models are increasingly prevalent, such as working remotely from abroad, extending beyond traditional paradigms. For example, spending the summer by the sea while remaining productive.
In the following example, we highlight important topics to consider:
Case Study: An office employee, Mr. Mayer, plans to take a four-week vacation in July to visit his wife’s family in Brazil. However, his employer has imposed a vacation ban for the first two weeks of July due to a heavy workload. Instead, the employer offers Mr. Mayer a “workation” option, allowing him to work from Brazil during this period through an agreement.
The applicable labor law primarily depends on the usual place of work. Temporary work abroad is permissible. If the usual place of work cannot be determined, the applicable labor law follows the state where the employer is based. Parties can also choose the applicable law, but maintaining the home country’s law (specifically Austria) is advisable for shorter international stays to avoid complications.
From a social security perspective, the principle of territoriality applies, with exceptions for secondments. Under Austria’s extraterritoriality principle (§ 3 Abs. 2 lit. d ASVG), there’s a five-year obligation to pay social security contributions in Austria, even if the work is not physically performed there. Third-country situations often lead to dual contributions. Avoid this by leveraging bilateral agreements—Austria has an agreement pending with Brazil since 2022.
Regarding income tax, Mr. Mayer, maintaining residency in Austria during his Brazil stay of less than 183 days in the tax year, remains 100% liable for taxes in Austria.
In conclusion, employers should closely monitor employees’ international work to avoid tax liabilities or double contributions. Be aware of potential social security risks, especially in non-agreement states. Austria retains rights under secondment, but careful consideration is needed to manage these complexities.
We would be happy to advise you on this topic (info@artus.at).
PS: Please note, that we are no native speakers and that our blogposts were translated with the help of AI.
