Tax residency

Tax residency is a legal status defined by each country’s own tax law, and it is separate from nationality and from immigration status. A tax resident is typically taxed on worldwide income and gains, while a non-resident is usually taxed only on income arising in that country. Tests vary: many countries use a day-count threshold, often around 183 days in a tax year, but most also look at factors such as having a permanent home, where your family lives, where you work and where your economic interests are centred. A few countries, notably the US, also tax their citizens wherever they live.

Because tests differ, a person can be resident in two countries at once, or in none. Double tax treaties, many based on an OECD model, contain tie-breaker rules that look in turn at where you have a permanent home, your centre of vital interests, where you habitually live and your nationality, and they allocate taxing rights and give relief for tax paid elsewhere. Common misunderstandings are that staying under 183 days guarantees non-residence, or that a residence permit or golden visa automatically makes you tax resident. Leaving a country can also trigger exit taxes or leave you still resident there. Rules change often, so take professional advice for your circumstances.