Parents' home as "permanent home available"?

[RealDude]

Can happen to anyone, for example from a business competitor, wife etc.

Or Wise

 

[algotrader]

Having a business in country A is usually a stronger case for centre of vital interest than having a permament address in country B according to OECD practice. That is even more the case if you spend <183 days in country B and if you don't have a rental contract or don't own a home there. There can be an exception in some cases where country A is also the country of your citizenship or you have strong family ties (children, spouse) there. Otherwise, everyone with a holiday home would automatically become a tax resident in every country he possesses a holiday home.

I'm in a somewhat similar situation because I'm owning an apartment, have residence permit, am registered as a sole trader and spend >183 days in Country A (which has favorable tax laws for a part of my business and no CFC rules for natural persons) and would like to have a company with second residency in country B (which has more favorable taxation for another part of my business) but spend only a part of the year there. I know that I could be considered tax resident in B as well but it wouldn't have any negative impact anyway.

 

[pastet89]

Having a business in country A is usually a stronger case for centre of vital interest than having a permament address in country B according to OECD practice. That is even more the case if you spend <183 days in country B and if you don't have a rental contract or don't own a home there. There can be an exception in some cases where country A is also the country of your citizenship or you have strong family ties (children, spouse) there. Otherwise, everyone with a holiday home would automatically become a tax resident in every country he possesses a holiday home.

I'm in a somewhat similar situation because I'm owning an apartment, have residence permit, am registered as a sole trader and spend >183 days in Country A (which has favorable tax laws for a part of my business and no CFC rules for natural persons) and would like to have a company with second residency in country B (which has more favorable taxation for another part of my business) but spend only a part of the year there. I know that I could be considered tax resident in B as well but it wouldn't have any negative impact anyway.

What is OECD practice?

I am not judging things subjectively, I am reading the DTA and the tie breaker rules by order priority. The first one is "permanent home" and is before center of interests.

That being said, it's important to be indeed a permanent home and not a villa (as you said holiday).

And also to work you must have it in only one country and not have it any other. If you have no home in no county or multiple homes in many countries it becomes subjective.

Also, when going nomad mode it must be AirBnb or sth, rental contract for decent time in other country may also count as permanent home and again to make things subjective.

 

[backpacker]

What is OECD practice?

If a country grants you an ordinary tax residence certificate (not some "funny business" like the Georgian HNWI certificate) you are tax resident of that country.

You may trigger tax residency in a second jurisdiction; that's the time when a DTT comes into play.
Otherwise a DTT (and OECD) is irrelevant.

The term "permanent home available" depends on how each country sees it. Example: Egypt considers the term different from Switzerland.
It doesn't matter if you own, rent or just live there as long as you are in possession of the keys.

However, just building your case on a "permanent home available" is as weak as it can get if you are unable to proof extended presence in the country + local ties.
Thie "proof" is the only reason why tax residence certificates have value: To easily proof, for whatever purpose.
If it is an ordinary tax residence certificate and both countries have a DTT in place, the other country's tax authority won't dispute.

 

[pastet89]

The term "permanent home available" depends on how each country sees it. Example: Egypt considers the term different from Switzerland.
It doesn't matter if you own, rent or just live there as long as you are in possession of the keys.

However, just building your case on a "permanent home available" is as weak as it can get if you are unable to proof extended presence in the country + local ties.

Now you are getting my point, that's why I started the thread.

I was wondering if it's enough to have just parents home available without living there.

In terms of ties: it's my home country so that should be easy.

But I don't only can not prove that I live there, exactly the opposite: I want to prove that I don't.

 

[algotrader]

I was wondering if it's enough to have just parents home available without living there.

But I don't only can not prove that I live there, exactly the opposite: I want to prove that I don't.

This would be a question for a specialized tax lawyer who understands the tax law of your country and the country where you want to do your business. IMO just having a parents home in one place doesn't make a case for tax residency without formal proof such as a written rental contract. However, in the case of Boris Becker, having keys of his parents/sister flat together with spending >183 days there was sufficient to condemn him by German authorities.

I don't understand your second statement. I thought you want to prove that you are tax resident in the country of your parent's home although you have or want to have a business in another country. Now, you're saying that you want to prove that you are not a tax resident in your home/birth country? Then, you will need to prove that you have a tax residence somewhere else. In Germany, they have this "perpetual traveller" rule which says that if you travel around and don't spend too much time in Germany, you won't be considered a tax resident there anymore. But this is a very weak rule I wouldn't count on.

 

[pastet89]

I don't understand your second statement. I thought you want to prove that you are tax resident in the country of your parent's home although you have or want to have a business in another country. Now, you're saying that you want to prove that you are not a tax resident in your home/birth country?

I want to prove that my residence remains my home country if I am nomad and I want to prove that I don't live there. Which is actually true.

When you travel without settling and you have no other tax residence, you must have a tax residence somewhere, and it is by default your home country, even if you don't live there.

I was scared not to be perceived it's the country where I'd open my other company, but the DTA says that having a "permanent home available" (but without mentioning you need to live there) is more important than economic interests. So that's my hope why should work.