Global business travel has experienced a seismic shift post-pandemic. From having all travel ground to a halt to the rise of hybrid work models, the nature of corporate travel has evolved. As companies now begin to redefine their travel policies, the implications of international travel on corporate tax compliance are growing in significance. Counting employee travel days to avoid unintentional tax residency and reporting liabilities is of strategic importance.
This post explores the current and future business travel trends and how they intersect with the importance of day counting for tax residency compliance. We’d invite business leaders and employees who travel frequently to read until the end for a chance to be part of transforming business travel reporting with Daysium.
n 2020, global business travel came to a standstill due to the Covid-19 pandemic. Even though travel has slowly recovered, it looks different today.
The most notable stats tell the story:
These changing dynamics are essential for corporations to consider, especially as employees travel across borders and into new tax jurisdictions.
The big shift after the pandemic has been in our workplace. A central office to gather all employees together every day is no longer a given for companies, big or small. While fully remote work has diminished since the pandemic, hybrid models have taken root. For instance, 26% of employees in the UK worked with a hybrid model as of June 2024.(5) This shift has broad implications—not only are employees splitting their time between home and the office, but they might also be travelling internationally to do so.
Business travel is no longer confined to meetings and conferences. Now, employees may be crossing borders to get to their office every few days of the week. These arrangements raise concerns for companies about payroll reporting obligations and tax residency compliance. Employees who regularly commute from one country to another—for work or business—may unintentionally trigger tax obligations that require day counting to maintain compliance.
The improvements in technology combined with the shifting company policies of allowing more hybrid ways to work have led to another shift: an increase in digital nomadism. The trend enables employees to work from anywhere in the world. While this flexibility is attractive to employees, it can create significant tax compliance challenges for employers. Employees who live in one country but work in another could unknowingly create payroll compliance and even tax residency implications for the company, and themselves.
Take, for example, the UK and how its tax authority, HMRC, treats non-resident directors (NRDs). UK companies with NRDs who spend time working in the UK have to operate payroll reporting and withholding duties — whether or not they pay the director. NRDs who perform their work fully remotely abroad may even risk creating issues with the company’s establishment. The UK entity could create a permanent establishment for corporate tax in the location where the NRD lives.
For companies, this requires a proactive approach to tracking day counts. Employees’ ability to lead a digital nomad lifestyle through flexible work arrangements could mean they travel more for work and leisure. This blending of personal and professional travel makes it even more critical for businesses to stay aware of how many days their employees spend in various countries.
As companies adjust to this evolving landscape, several trends are driving the future of business travel. Let’s explore these key trends:
In a globally mobile workforce, cross-border travel poses significant compliance challenges for businesses. Governments worldwide are tightening their tax rules, and failure to comply with tax residency regulations can have severe financial repercussions. Employees who frequently travel to different countries—for work or personal reasons—could easily trigger payroll and tax liabilities in multiple jurisdictions.
Companies need to ensure they count business travel days and check employee residency. International employees need to be managed to ensure compliance with all local tax and employment laws.
The challenge is not only for employers to maintain a clear and accurate record. Considering the impact of digital nomadism and hybrid work, educating employees in their own active role in day counting is vital for compliance. Employees may create unfortunate income tax obligations for themselves if they don’t monitor their work and leisure days spent in specific jurisdictions. To read more on the challenges in cross-border travel for work, you can explore our post ‘Case Study: Navigating Tax Residency Challenges with Daysium’. The case study looks at two Irish cases highlighting the need for immaculate records.
Without proper day count records, businesses and individuals might find themselves grappling with unexpected tax bills, penalties, and audits. A transparent and easy-to-maintain system for day counting can solve many compliance headaches.
Technology is playing an increasingly significant role in simplifying corporate travel management. AI and analytics tools are not just improving how businesses book and plan travel—they’re also critical for ensuring tax compliance. Tools that can log travel patterns, optimise itineraries, and integrate with payroll systems are essential in today’s business environment.
At Daysium, we are at the forefront of transforming day counting for tax compliance. Our platform helps individuals effortlessly manage their day counting with an automated logging system. Day counts are tailored based on individual needs, ensuring compliance with relevant legislation. Using Daysium means you’re not just creating an accurate count of days. You can also add corroborating evidence, which can be vital in establishing a distinction between work and leisure travel.
Strategic planning is essential as businesses navigate the complex landscape of modern business travel. Here are three key steps to prepare for the future:
Business travel is not going to disappear, but how, when and for how long we travel for work is transforming. As companies adjust to the hybrid work model and increasingly international workforce, day counting for tax residency compliance increases in importance. Maintaining robust records is a strategic advantage for companies and globally mobile individuals.
Daysium currently offers tools for HNWIs to manage their day counting. But we want to go further and ensure businesses can easily navigate this changing landscape. If you want to be at the centre of this change, we invite you to join our Enterprise waitlist for Daysium. Early adopters will be the first to get their hands on our corporate solution and be part of designing and testing the service. Join the waitlist here: https://scorecard.daysium.com/enterprise.
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