2020 has been an extraordinary year. One of the most significant features of 2020 has been the number of people who have worked remotely because of Covid-19 restrictions. For tax, this has created challenges as an employee, working remotely for an offshore employer, can trigger tax risks for their offshore employer such as permanent establishment (
PE) and employment tax risks. In New Zealand, this has been particularly acute, with a significant number of people either physically unable to leave New Zealand or coming to New Zealand due the relatively Covid-19 free environment, while continuing to work for their offshore employer. This number is estimated to increase. In response to these challenges, the New Zealand Inland Revenue have made two changes.