Article 5 Commentary - Home Office as a Fixed Place of Business

The 2025 Update introduces changes to the Commentary on Article 5 that clarify the circumstances under which an individual's home could constitute a "place of business" of the enterprise for which the individual works  and thereby give rise to a fixed place of business (FPOB) permanent establishment.

These changes are characterised by the OECD as an evolution of existing principles rather than a doctrinal departure, building on guidance that first emerged prominently in the context of pandemic-era working arrangements. The updated Commentary addresses the analytical framework that must be applied: whether the enterprise has required or habitually sanctioned the use of the home as a place of business, and whether it has a degree of control over or access to the home. Where an employee unilaterally chooses to work from home without any instruction, expectation, or material benefit to the enterprise, the home will generally not constitute a FPOB of the employer.

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