Cross-Border Cooperation
Who Is Responsible for What?

1. Why clear responsibilities are essential

More and more businesses are operating across borders — whether to carry out projects in another country or to manage international teams. Especially for entrepreneurs from Slovakia or other neighbouring countries of Austria, the question often arises: who is responsible for what?

Depending on the nature of the cooperation, tax, employment law, and social security obligations can arise, which are not always straightforward. Clearly defining responsibilities helps to avoid legal problems and ensures smooth business operations.

2. Responsibility for tax registration

As soon as a business operates internationally, the question of where taxes are due arises. Key factors include the location of the company, where the services are provided, and the type of cooperation. Things get especially complicated if a permanent establishment is created in Austria, as this can trigger additional tax obligations.

Important points to consider:

• Difference between a permanent establishment and occasional activities: Long-term activities in Austria could lead to tax liability there.
  
  Our tip: If you regularly take on projects in Austria, check whether tax registration is required to avoid unexpected payments.


• VAT registration requirements: Companies providing services in Austria might need to apply for an Austrian VAT number.
  
  Our tip: Clarify early on with experts to avoid invoicing issues or later tax claims.

3. Responsibility for employees and social security

Entrepreneurs employing staff across borders must address the issue of social security. The basic rule is: employees are generally subject to social security in the country where they work. However, exceptions exist — for example, for secondments or work in multiple countries.

Important points to consider:

• Secondment or local employment contract? Staff temporarily assigned to Austria can, under certain conditions, remain insured in their home country (A1 certificate).
  
  Our tip: Always apply for the A1 certificate before work begins in Austria to avoid heavy penalties.


• Minimum wage and labour law: In Austria, many sectors are governed by collective agreements that stipulate minimum wages, which also apply to seconded workers.
  
  Our tip: Employers should check in advance which collective agreement applies to their employees to avoid penalties for wage dumping.

4. Contract design in cross-border projects

One of the biggest challenges in international cooperation is contract drafting. Different legal systems can result in agreements not being enforceable as intended in a particular country. It is crucial to clarify in advance which national law will apply and how disputes will be resolved.

Important points to consider:

• Which law applies? International contracts should clearly state whether Austrian or Slovak law applies.
  
  Our tip: For long-term business relationships, it may be worthwhile to establish a standard contract template for all projects.


• Liability and insurance: If something goes wrong in one country, who is liable — the sending company or the local branch?
  
  Our tip: Consider taking out business liability insurance that covers international activities to protect against unforeseen costs.