Worth knowing Challenges in determining the “tax residence”

As a person, you have a main residence and possibly also secondary residences. But where is your “tax residence”, that is, where are you considered as resident in the sense of the tax law? The answer to this question opens up tax opportunities in the international context as well as subsequent tax issues or even risks.

You work and live abroad and the matter seems crystal clear as far as tax is concerned. But maybe your stay abroad is only temporary. Does the fact that you have family in Germany mean that your centre of life may not (yet) have moved abroad?

The tax authorities also know that, with a given tax residency, there are often significantly higher tax burdens. As a result, the number of disputes that end before the Federal Finance Court or the Administrative Court is also increasing.

Because the determination of the tax residency is made on the basis of the “overall picture of personal and economic circumstances,” the case law to be considered is unfortunately casuistic and often holds surprises. Or would you have guessed that a motorcycle registered domestically can be an important indicator of tax residency in Austria? (BFG 26.4.2018, RV / 5101439)?

We know all the current criteria for determining tax residency. And we can readily judge from experience what is important in cases of doubt.