Double Taxation Agreement 183 Days

Article 5 of TT defines the concept of “permanent establishment” and other articles that examine different types of income, such as commercial income and income from self-employment, refer to the commercial activity carried out by that institution and at the same time determine the tax legislation of the country of origin. While physical sectors such as administrative headquarters, branch, office, factory, etc., are defined as stable establishments, in some cases the existence of an MOU depends on the time spent in the country of origin. All days spent in the country of work include working days, weekend days, holidays, days off and sick days as a rule2. Even all parts of a day count as an entire day spent abroad, so arriving the day before a meeting, or leaving in the morning should also be included. This is different than for international transits that have passed through the airport. Nor can .B apply to civilian workers, military personnel, cabin crew and teachers, etc. Or if you`re the legal director. In these situations (and there may be more!), other attribution rules may apply to your job than the 183-day rule. The OECD`s position on the impact of the COVID-19 crisis on residence is clearer than other issues. According to the OECD`s approach, relatively short periods of stay, it is unlikely that the centre of the individual`s vital interest will have an impact.

Even if the following test is taken into account under section 4, paragraph 19 of the commentary, the house in which the person has usually stayed is determined to take into account not only a limited number of days spent during a given period, but also the frequency, duration and continuity of residence, which are part of the individual`s established routine. The new coronavirus (“COVID-19”), which appeared in December 2019 in the city of Wuhan, China and which spread rapidly with the contribution of interdependence between countries around the world, continues to have a significant impact in many areas of life. One of these areas is international tax law and, in the near future, potential disputes over tax rights should be expected, which will be delineated by the prevention of double taxation (DTT) conventions. Let me go into a little more detail. First, the working country normally only wants to tax labour income related to working days in the host country. Most countries have progressive tax rates. In such cases5, you can benefit from lower tax rates in this country, as only a portion of labour income is taxable in the country of work. In some countries, there is even a fixed (low) percentage for non-residents working in that country, or no taxes. Dennis Strijker reveals 9 ideas on one of the most well-known, but not always understood, principles of expat taxation.