The 2025 Commentary ends its guidance on home working with five examples. They are short, and the detail in each one was chosen carefully. Read closely, they show where the line is.
All five concern an employee of RCo, an enterprise of State R, working from State S. Example A is about whether the place is fixed. Examples B to E are about whether the home is a place of business of the enterprise. Every conclusion is qualified: it holds in the absence of other facts and circumstances showing otherwise. They are illustrations, not rules.
The five examples
An employee who normally works in State R rents a place in State S and works from it for three consecutive months, following a holiday there. The Commentary concludes that the place is not fixed: the business has been carried on there for three months in the twelve-month period, and that lacks permanence. The result is the same if the reason was to care for a sick relative, or if she worked from somewhere other than where she was staying.
Two refinements follow. If a place is used on a recurrent basis over several years, each period has to be considered together with the number of times it is used. And it is irrelevant that the person keeps the place and pays for it all year: what counts is the time spent working there.
In Spain: a London analyst who spends June to August working from a rented villa in Mallorca, once, does not give her employer a fixed place of business. A Stockholm executive who spends every winter, November to March, working from his own flat in Marbella is in the recurrent pattern, and the answer needs more care.
The employee works from her home in State S one or two days a week throughout the year, 30 % of her working time. The home is fixed, because it is used throughout the twelve months. But she spends less than half her working time there, so the home is not a place of business of RCo.
In Spain: a manager who lives in Irún and works Monday to Thursday at the company's office in Bayonne, across the French border, and Fridays from home. Or a consultant living in Madrid whose weeks are spent at client sites in Frankfurt and Zurich. The first test resolves both.
The employee works from home in State S for 80 % of his time and regularly visits RCo's clients in State S to provide services to them. The home is fixed. He is above 50 %, and there is a commercial reason: his presence makes it easier for RCo to provide services to customers there. The home is a place of business and a permanent establishment of RCo.
In Spain: an implementation consultant for a French software company who lives in Zaragoza and spends a day or two a week at Spanish customers' premises configuring the product. Note what triggers the result: not the 80 %, but the combination with regular, service-related contact with customers in the country.
The employee works from home for 60 % of his time in an exclusively client-facing role, serving RCo's clients in State R, State S and third States. He does so remotely, without meeting them, except that once a quarter he spends a day at a client's premises in State S reviewing performance against the contract. The home is fixed and he is above 50 %. But the mere presence of clients in State S is not a commercial reason, and the visits are intermittent and incidental. The home is not a place of business.
This is the most instructive of the five, because it is the closest. A customer-facing employee, with customers in the country, who visits one of them regularly, does not create a permanent establishment where that contact is marginal to how the job is done. Nigeria recorded that it does not agree with the conclusion, and Israel reserved the right to see the facts differently.
In Spain: a customer-success manager for an Irish company who lives in Valencia, handles forty accounts across Europe by video call, two of them Spanish, and has lunch with one of those twice a year.
The employee works almost exclusively from home in State S, providing services virtually to customers in State R or elsewhere in time zones different from State S. Performing the work in State S enables her to be fully available to those customers, for instance for real-time or near real-time service around the clock. The home is fixed, she is above 50 %, and there is a commercial reason: her presence in State S facilitates RCo's services to customers in other time zones. The home is a permanent establishment.
The link with paragraph 44.18 matters here. A different time zone does not, by that fact alone, give a commercial reason. In Example E the company uses the location to deliver something it could not otherwise deliver.
In Spain: a US company that stations a support engineer in the Canary Islands precisely so that American customers have cover during the American night.
Continue with the commercial reason test, or return to the main guide.
Source: OECD (2026), Model Tax Convention on Income and on Capital 2025 (Full Version), Commentary on Article 5, paragraphs 44.1 to 44.21, added on 18 November 2025. The Commentary is described here in our own words; the paragraph numbers are given so that it can be checked against the original.
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