In practice, more and more foreign companies are allowing their Austrian employees to work from home.
This poses a risk for foreign companies that working from home could establish a permanent establishment of the foreign company in Austria. In the past, permanent establishment risks have often been assessed more strictly in Austria than in other EU countries, such as Germany.
In November 2025, the OECD clarified the conditions under which working from home can trigger a permanent establishment.
The Federal Ministry of Finance (BMF) followed up with information on 4 January 2026.
Easing of restrictions
The main changes at a glance:
- 50% of working time in a home office: a permanent establishment should only be triggered if the Austrian employee works at least 50% of their working time in a home office within a 12-month period.
- Economic reason: A new requirement is that there must be significant business reasons why the company needs the home office activity in Austria.
Example: there are important customers in Austria and the physical presence of employees in Austria facilitates on-site customer service.
A permanent establishment is only triggered if both conditions are met.
This should make it easier for international corporations to allow Austrian employees to work from home in the future.
If a company allows its Austrian employees to work from home in order to attract employees and retain them in the long term, there is no economic reason in the above sense and no permanent establishment should be triggered.
We recommend reviewing permanent establishment risks.
We advise on avoiding permanent establishment risks, voluntary disclosures to protect management, adjusting transfer pricing methods and avoiding double taxation.
