TAX AND LABOR ALERT: Tax Authority Guidelines for Telework in the 2026 Fiscal Year

Many organizations have been paying compensation for telework expenses without proper contractual formalization, assuming that the reduced value of these amounts exempts them from inspection scrutiny. However, the recent guidelines from the Tax Authority (AT) for the 2026 fiscal year reiterate the need for strict compliance and heightened attention from companies.

Below, we detail the essential compliance points that your organization must ensure to mitigate labor and tax risks.

1. Mandatory Written Agreement

The Tax Authority has clarified that any compensation paid — even those falling within the exemption limits set out in Ordinance No. 292-A/2023 — will be summarily reclassified as employment income (subject to Personal Income Tax/IRS withholding and Social Security contributions) if there is no addendum or written contract that unequivocally supports the telework regime.

2. Focus on Auditing Unsupported Costs

The AT's inspection plan for 2026 prioritizes the verification of amounts paid as "cost allowances" (ajudas de custo) that lack legal foundation. Allocating fixed monthly amounts to employees, without the respective contractual clause justifying them as telework expenses, exposes the company to retroactive tax assessments and fines for reporting non-compliance.

3. Exemption Assumptions

The exemption limit remains fixed at €1.00/day (or €1.50 in the case of a Collective Bargaining Agreement). However, it is crucial to understand that the tax effectiveness of this payment now depends, cumulatively, on:

• Documentary proof of the expenses (or adherence to legal limits);

• The existence of a formal and written agreement that expressly provides for the performance of duties under a telework regime.

Risk Management Note

The mere observance of the value limits stipulated by law does not, by itself, guarantee tax exemption. Without the formalization of a Telework Addendum signed by both parties, these amounts can be interpreted by the authorities as salary-related bonuses. This reclassification strips them of their compensatory nature and unexpectedly increases the company's contributory burden.

Has your organization already ensured the compliance of telework agreements for 2026? Preventing tax contingencies and ensuring the correct deductibility of costs requires preventive action. The Global Lawyers team is available to conduct a detailed audit of your contract models and supporting documentation.

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