An employee working for a Slovak employer with a place of work in the Slovak Republic decides to work for the employer for a certain period from abroad as part of his private stay abroad. Is it possible to do short-term work abroad for a Slovak employer? What obligations does the employee, and the employer have under the legislation? What is the need to be wary of such a work performance setting, because of an explicitly private request by the employee? And what are the implications for the tax and levy obligations of both parties? We will address these questions in the following article. We hope it will be of use and answer at least the basic questions.

What if an employee decides to work for a Slovak employer from abroad?

For example, an employee decides to temporarily stay abroad outside the Slovak Republic for private reasons and, as they often need regular income or simply enjoy their work and don‘t want to interrupt it, they agrees with their employer that they will work for them from abroad for a certain period. Not for another entity, not for a branch of the employer or its sister or parent company in a foreign country, but for the same Slovak employer (the same entity).

In principle, such an agreement is possible if the employer agrees, as the place of work is one of the essential elements of the employment contract and its change cannot be made by a unilateral decision of the employee, but the employer’s consent is also required. The employer may, but need not, agree to the performance of work from abroad. If the employer does not agree to the employee performing work from abroad, the employee is not entitled to perform work from abroad but at the agreed place of work according to the applicable employment contract.

However, if the employer agrees to allow the employee to work from abroad at the private request of an employee who travels abroad at his own expense, primarily for private reasons, whether on holiday and then plans to remain there after the holiday to continue to work for the employer, it is necessary to modify the terms of the employment contract as originally agreed.

Is a change to the employment contract necessary in this case?

The prerequisite for such an agreement is a type of work that makes this possible, in practice this will most often be the case for types of work that are not manual in nature and whose demands or requirements allow for a form of telework (i.e. where the work is carried out using information technology where there is regular electronic transmission of data at a distance).

Such work from abroad, for the same entity, is neither a secondment nor a temporary assignment, nor a business trip.

From a legal point of view, for such a specific case (private request of the employee due to an extended stay abroad), if the work can be performed by teleworking, it is necessary to agree on an amendment to the employment contract, whereby the employer is obliged to make the amendment in writing and to issue one copy of the amendment to the employee. Section 44a of the Labor Code shall apply when the place of work is changed to a State other than the State in which the employee usually works.

According to the provision in question, the parties must agree:

• place of work in a state or states outside the Slovak Republic,
• the period of work in a country or countries outside the Slovak Republic,
• the currency in which the wages or part of the wages will be paid,
• information on other benefits related to the performance of work in the state or states outside the territory of the Slovak Republic in money or in-kind benefits,
• an indication of whether the employee’s repatriation is arranged and what conditions apply.

This is without prejudice to other related obligations of the employer, whether under the Labor Code or under specific legislation with regard to the particular situation. 

What tax and levy implications does this involve?

Although it may seem that from the point of view of work performance it is only a change of place of work, this change may bring with it a number of tax and levy implications that cannot be underestimated. A key factor in assessing the tax and levy implications is the country of tax residence as well as the employee’s domicile. If an employee goes abroad for only a short period of time (e.g. a few weeks or months), they are likely to remain tax resident in the Slovak Republic. However, for a long-term stay (more than 183 days in a year), they may acquire tax residence in another country, which may have implications for the taxation of their income abroad.

In some cases, the long-term employment of an employee from abroad may lead to the establishment of a so-called permanent establishment of the employer in that country. This may have implications for the taxation of the employer’s own income in that country, the need to register and comply with local tax and legal regulations.

In case you want to find out more or you do not know how to properly proceed when performing work from abroad with your employees (whether in the form of secondment, hiring, foreign travel or change of workplace for reasons on the employer’s side), we will be happy to go through your specific case with you and advise you.

Marcela Jašurková

Senior Associate | Accace Slovakia

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Martina Paprčková

Tax Manager | Accace Slovakia

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