Uglobal Immigration Magazine Volume 2, Issue 1 | Page 39

UGLOBAL.COM where you regard your permanent home to be); citizenship (in the case of the United States and Eritrea, regardless of where you actually live). In addition, one country can have different definitions of tax residency for different purposes. For example, for income tax purposes, the United States defines tax residency by citizenship or residence. But, for estate and gift tax purposes, tax residency is defined by citizenship or domicile. Yes, tax residency can be very complex. The OECD, or Organization for Economic Co-operation and Development, has recently compiled a guide about tax residency for countries that have agreed to OECD’s Common Reporting Standard. POINT 3: BE MINDFUL OF THE DANGER OF BECOMING A TAX RESIDENT OF MORE THAN ONE COUNTRY You are a tax resident of any country where you qualify under that country’s rules for tax residency. This means that you could be subject to worldwide taxation by more than one country. For example, there are many Canadian residents with U.S. citizenship who are subject to worldwide taxation from both Canada and the United States. Here are two other examples of dual-tax residency. First, U.S. citizens are always “tax residents” of the United States regardless of where they live in the world. If a U.S. citizen meets the conditions for tax residence in another country, he will have dual tax residency and be subject to full taxation in both countries. Second, a Canadian resident who spends enough time in Portugal will become a tax resident of Portugal. He never dissolves his Canadian tax residency and becomes a tax resident of Portugal. He now has dual tax residency. Dual citizenship is generally a good thing. Dual tax residency is a bad thing. Try to avoid it. Many U.S. citizens are renouncing U.S. citizenship because they find it too difficult to satisfy the tax and information reporting requirements, which result from being tax residents of more than one country. It is also important to note that permanent residents of the U.S. are also tax residents, regardless of where they live. This is useful to know regarding the EB-5 program, which grants successful applicants U.S. permanent residency through a green card. POINT 4: UNDERSTAND & BE CONSCIOUS OF WHAT IS REQUIRED TO SEVER AN EXISTING TAX RESIDENCY If you don’t want to be a tax resident of a country you must sever tax residency with that country. The key point is that you will not generally sever tax residency by simply moving to another country. In order to sever tax residency, you must: cease to meet the requirements that would make you a tax resident of a country in the first place or comply “ 对于几乎全部国家而言 一个人的 移民居住状态同他的税务居住状态 具有很大差异 ” 37