Workation - what is it? Tax nuances.

Workation – a growing trend that, simply put, combines work with vacation. This type of work arrangement, which became widespread during the pandemic, has now become an integral part of modern work life. In this article, we will discuss not only the benefits of workations but also the tax-related nuances and potential risks.

Tired of routine, office environments, or simply longing for warmth, employees are increasingly considering the option to both relax and stay on top of work by changing their surroundings. But what should be taken into account?

• First and foremost: can the employee fully perform their duties remotely, and do they have all the necessary tools?


• Second: location – is the chosen destination suitable for work? Is it safe, equipped with reliable internet access, and otherwise conducive to productivity?


• Third: data security – is the employee familiar with the company’s data protection requirements, and have they installed (if necessary) appropriate security software? It is crucial for companies to clearly define all internal guidelines and ensure that all employees are properly informed.

When it comes to benefits, a workation is an excellent way for employees to break out of their usual routine, boost productivity, and combine rest with work. And an employee’s productivity and motivation are key factors that matter both to the company and its leadership. Moreover, working from a different country or city can broaden one’s horizons, provide exposure to local culture, and create opportunities to build new professional connections. A workation can positively impact not only an employee’s emotional well-being but also their physical health.

According to the law, a workation is considered a form of remote work and is not equivalent to a business trip. Therefore, per diems are not applicable in this case, meaning that the employee is responsible for covering expenses such as travel, transportation, accommodation, and so on. Consequently, when calculating taxable profit, employer expenses related to remote work (i.e., workation) are not classified as business trip expenses and are not subject to the limited deductible expense rules set out in Article 21 of the Corporate Income Tax Law (for more details, see here).

Despite the tax-related nuances, a workation is a great opportunity for your employees to find a balance between productive work and well-deserved rest. If you're concerned that work might suffer as a result, don’t hesitate to communicate openly with your team, set clear boundaries, and establish conditions—this will give you peace of mind, ensure tasks are completed, and allow your employees to return refreshed, energized, and motivated. Wishing you a fulfilling holiday and smooth workdays ahead!