OECD Updated Tax Framework for Global Remote Work
The 2025 Model Tax Convention clarifies cross-border reporting rules for employers of mobile workforces.
Updated on Sept. 30, 2026 in Remote Work
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The OECD published its updated Model Tax Convention on Income and on Capital 2025, providing a revised framework for international tax negotiations. The update includes critical modifications regarding worker mobility and tax-reporting obligations for remote staff.
Why it matters
As cross-border remote work increases, these changes provide necessary guidance for businesses to navigate evolving transfer pricing and tax nexus requirements. The updates aim to standardize compliance expectations across participating jurisdictions.
The 2025 update to the Model Tax Convention introduces specific language in Article 5 and Article 25 to address worker mobility. These changes were formally approved by the Council in November 2025 and currently apply to OECD member jurisdictions.
The players
OECD
An international organization of 38 member countries that coordinates economic policy and establishes global tax standards.
OECD Council
The primary decision-making body of the organization, consisting of representatives from member jurisdictions who oversee international policy frameworks.
The details
The update incorporates guidance on transfer pricing and tax-reporting specifically tailored to the modern remote work environment. By modifying Article 5, the OECD clarifies how jurisdictions determine the tax nexus for employees working outside their home country. Article 25 adds new options for negotiating these tax treatments, which companies must monitor to ensure their cross-border employment arrangements remain compliant.
Timeline
The OECD Council approved changes to the convention in November 2025.
The updated Model Tax Convention was published on September 30, 2026.
Market Landscape
The 2025 update follows a pattern set by previous revisions to the OECD Model Tax Convention, which periodically adapts international norms to shifts in the global labor market. This update marks a departure from earlier frameworks by explicitly integrating remote work and transfer pricing guidance.
Businesses with cross-border employees should review their tax-reporting structures against these new Article 5 and Article 25 standards. Consult with international tax counsel to assess how your current remote workforce distribution aligns with the latest OECD framework.
The takeaway
The OECD 2025 updates provide a standardized baseline for managing the tax complexities of a dispersed global workforce. Review your current remote work employment agreements to ensure they reflect the updated reporting guidelines for cross-border mobility.
Further reading
For more on managing international labor, see the Remote Work section.
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