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EU Domicile & Residency

Determining EU residency for tax purposes involves understanding the EU’s laws and regulations on tax residency. The EU does not have a uniform rule for determining tax residency, as each EU member state has its own laws and regulations. However, the EU has issued some guidance on the matter through the EU Council Directive on the coordination of laws, regulations, and administrative provisions relating to direct taxation.

According to the EU Council Directive, an individual is considered a tax resident of an EU member state if they have their habitual abode in that state. Habitual abode is defined as the place where an individual has their center of vital interests, which includes factors such as their personal and economic relations.

To determine habitual abode, EU member states use a combination of factors, including the location of an individual’s permanent home, the location of their family, and the location of their professional and economic activities.

It is important to note that an individual can only be a tax resident of one EU member state at a time. If an individual has their habitual abode in multiple EU member states, the member state where they have their closest economic and personal ties will be considered their place of residence for tax purposes.

In addition, EU member states have concluded a number of double tax treaties to avoid the double taxation of individuals. These double tax treaties generally include a tie-breaker rule, which is used to determine the country of residence for tax purposes in case of dual residence.

Individuals who are unsure of their residency status should consult with a tax professional or the tax authorities of the relevant EU member state for guidance. It’s important to keep in mind that tax laws can change frequently and it’s best to consult with a tax professional who is up-to-date with the current regulations.