Residence for corporate income tax purposes: general Report

Residence is one of the most fundamental legal concepts for taxation. This general report aims to provide a better understanding of the function, meaning and role performed by the concept in modern corporate income tax systems. A comprehensive assessment of the branch reports reveals a complex normative landscape shaped by globalisation and digitalisation and evolving legal concepts under a mist of indeterminacy. Regarding domestic law, there is considerable diversity, with divergent jurisdictional approaches, encompassing the interplay of incorporation, governance and other criteria and with a clear trend of expanding the scope of the concept. At the income tax treaty level, while most treaties still adhere to place of effective management as a tie-breaker, there is a progressive shift to the mutual agreement procedure (hereinafter MAP), which should be regarded with concern. Such a mechanism, as it prevents taxpayers from anticipating the tax consequences of their (often genuine and needed) behaviour, is particularly worrisome, taking into account that residence is often a trigger for worldwide taxation. The general report underscores the need for enhanced international cooperation and legislative reforms to address the challenges emphasised by globalisation and digitalisation, advocating for a nuanced balance between sovereignty and global tax fairness.