April 2020 - OECD secretariat analysis of tax treaties and the impact of the COVID-19 crisis

The COVID-19 pandemic has forced governments to take unprecedented measures such as restricting travel and implementing strict quarantine requirements. As a result of these restrictions, many cross-border workers are unable to physically perform their duties in their country of employment. These employees would have to stay at their home country and work through telework, and could even be laid off because of the non-performance of duties.

In the wake of these international issues, the Organisation for Economic Co-operation and Development (“OECD”) has issued an analysis called “OECD Secretariat Analysis of Tax Treaties and the Impact of the COVID-19 Crisis”(referred as the “OECD Analysis” in this this newsletter) on 3 April 2020. Mr. Pascal Saint-Amans, director of the OECD’s Center for Tax Policy and Administration, said “The exceptional circumstances of the COVID-19 crisis calls for an exceptional level of coordination and co-operation between countries, notably on tax issues, to mitigate the potentially significant compliance and administrative costs for employees and employers”.

This tax newsletter summarizes the OECD Analysis and discusses the potential tax implications that both Chinese enterprises and individuals should be aware of if they have to temporarily perform business activities or render employment services elsewhere as a result of the COVID-19 pandemic.

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