Postcards from Around the World
The annual conferences of Praxity and Mazars were once again held live after the COVID breaks. Our experts participated in the events, gathering newest information to serve our at the highest level. The most important takeaway from the conferences was the opportunity to meet new people and create contacts all around the world. For example, if a Finnish company wants to do business abroad, or a client of Praxity in another country wants to expand to Finland, international contacts significantly facilitate outreach. During the conferences, it was easy to get acquainted with professionals from other countries belonging to the Mazars and Praxity networks during dinners and other evening programs. There were also several breaks and various workshops during the day, which provided opportunities to chat and network with other participants.
New Orleans – Praxity Global Conference
This year’s Praxity global conference, held annually, took place in the United States at the Ritz-Carlton in New Orleans from October 16th to 19th, after a two-year COVID break. From Tuokko, our certified public accountants Vesa Laakso and Topias Hirvonen participated in the event.
The conference featured various lectures and gatherings by continent and business area, in addition to lectures held for about 200 participants. It was interesting to note that almost all participants worldwide are facing the same challenges. These challenges include well-known issues like inflation, rising interest rates, and energy price increases, but also a shortage of skilled staff and declining birth rates. In addition, hot topics in the auditing industry such as ESG reporting and the LCE standard sparked discussions.
Lectures for all participants covered examples of how staff have been committed to longer careers in companies and encouraged businesses to develop gender equality. Discussions also took place on better utilizing existing IT systems, collecting online recommendations as part of marketing, and possible future technology for companies in the Praxity network. Most conference participants were more experienced practitioners, so understanding the thoughts of the millennial generation was a topic that recurred several times over the four conference days.
Lisbon – Mazars Global Mobility Services Conference
The annual Global Mobility Services conference organized by Mazars was held this time as a live event in Lisbon on October 6-7, after a break due to the coronavirus. Pauli Simolin, an expert in international taxation, participated in the event from Tuokko.
Workation
The conference’s central theme was the changes in working life brought by the COVID. Remote working is likely a familiar concept to everyone, but now, the concept of “workation” has been introduced alongside it. This concept could be applied, for example, in a situation where a Finnish employee of a Finnish employer wants to spend his winter under the sunshine in Spain. The purpose would be to allow the employee a holiday in the south, while also managing work tasks to some extent. Practically, workation differs from remote work especially in that the employee voluntarily works abroad compared to their usual workplace. According to research presented at the conference, in Germany, for example, it is common for new employment contracts to mention how long an employee can be working abroad each year – provided their tasks allows it.
From the employer’s perspective, this phenomenon has multifaceted effects. Firstly, there is the question of whether the employer will establish a Permanent Establishment (PE) abroad due to the employee’s activities, and how payroll should be managed in such a situation. On the other hand, whether the employment contract should be interpret in accordance the laws of the country where the contract has been signed or the country where the employee is located during workation. For example, in terms of minimum wage, protection from unlawful termination or sick pay. Thirdly, the employer must consider how to organize data security and whether the employee’s travel outside the EU jeopardizes the employer’s GDPR obligations. Finally, it can be concluded that issues related to occupational safety, responsibility, entry into the country, obtaining a work visa, or social security also need to be addressed.
Global Mobility Services
The conference also examined various options for global mobility services and their prevalence in different countries. Practically, if a Finnish company wants to hire a specialist from Germany, it must consider different options for utilizing that specialist’s contribution for the benefit of the Finnish company. The first option is to directly employ the worker for the Finnish company. In this case, either the Finnish company incurs employer obligations in Germany, or alternatively, an attractive arrangement should be offered to the employee to move to Finland. The second option is to purchase the specialist’s services in a way that the specialist provides them under an entrepreneurial status. However, there is a risk that the local Tax Administration interprets the concept of the economic employer in such a way that the Finnish company is still considered to be operating as an employer in Germany. The third option is to enter into a tripartite agreement with a German staffing company. In this agreement, the German staffing company would officially employ the specialist and thus assume all employer obligations. The Finnish company would then access the specialist’s contribution by billing the German staffing company based on a pre-agreed billing basis. These three options were the starting point at the conference, and the actual discussion and brainstorming focused on different variations of these main rules and their application possibilities.
IT Support for International Mobility Services
Finally, and importantly, the conference highlighted Mazars’ new IT tool to support international mobility services. The tool, named Assignment Pro, enables all parties to access the service platform and share access rights with the precision required by GDPR. The platform’s absolute advantages include consolidating information in one place and enhancing data usage. In addition, a vast repository of information related to taxation, social security, and tax treaties in different countries has already been built into the platform.
In practice, Assignment Pro, for example, compiles the basic information of tax returns from different countries, so the client does not have to fill them out repeatedly. Additionally, the software intelligently picks information, such as from travel calendars, based on which it can determine whether the employee incurs tax liability or the employer establishes a permanent establishment. The pre-loaded information also enables the production of payroll calculations in cross-border situations, considering social security and tax treaties.
Conclusion
Additionally, the conference provided an opportunity for an interesting legal case analysis of Shakira’s ongoing tax dispute against the Spanish tax authorities, a discussion on the development of the economic employer concept, and a discussion on strengthening international coordination and rules.
Praxity Briefly
We are part of the international Praxity, which is a cooperation organization of independent firms focused on audit and financial management services and management consulting. Founded in 2007, Praxity has grown into the world’s sixth-largest audit service alliance. The alliance operates from Asia to America, with over 780 member firms and more than 65,000 experts in 120 countries. The combined turnover of Praxity firms was about 7 billion in 2020. Each individual firm operates as the best expert in its region. In special international issues, we can always turn to Praxity partners, such as Mazars.
