Tax Treaties for Residency Status and Cross-Border Tax Planning

Treaty Tie-Breakers

If, for the purposes of a tax treaty, you are resident of one country but also a resident of the United States you will need to use tie-breaker rules to work out a single country of residence. The 2006 US Model Treaty states that this should be achieved by examining the following factors in the following order:

• The location of your permanent home: You have a permanent home in the US if you can be said to reside in it, have a room continuously available, use it to store personal property, have an office in the home or use it as an address for the purposes of a driving licence or insurance. Certain treaties consider the question of the individual’s family life in order to answer this question.
• The centre of your vital interests: This is answered by looking at the location of your major personal, economic and community interests.
• Your habitual abode: This is answered by looking at where you spend most of your time during the calendar year.
• Your nationality: This is determined by your citizenship or state of nationality.

Blacktower, for cross-border tax planning

The specialist financial advisors at Blacktower can help you with all aspects of your cross-border tax planning, including issues relating to your residency status, FATCA, FBAR and your pensions and retirement accounts.

For more information contact us today.