…this usually is the first question to find out whether a company has a deemed branch in another state by virtue of a person being involved in sales activities. If so, this has an effect on the tax position of both the company and its employees working in the other state on behalf of the deemed branch.
In the past one of the strategies to avoid this was to formally conclude the contracts outside of that other state. However, based on new developments, it so happens that such branch will be deemed to exist already if preparatory activities are intended to result in a contract. As a result of this change we advise to reassess your foreign sales activities.