The domestic laws of the various jurisdictions lay down the conditions under which an entity is to be treated as fiscally resident.
Generally, an Entity will be resident for tax purposes in a jurisdiction if, under the laws of that jurisdiction, it is liable to tax by reason of its domicile, residence, place of management or incorporation, or any other criterion of a similar nature. Generally an entity will only be tax resident in one jurisdiction, although that may not always be the case. Dual resident Entities may rely on the tiebreaker rules contained in tax conventions (if applicable) to solve cases of double residence for determining their residence for tax purposes.
Where an entity such as a partnership, limited liability partnership or similar legal arrangement has no residence for tax purposes it shall be treated as resident in the jurisdiction in which its place of effective management is situated or, in the case of a trust, the jurisdiction(s) in which the trustee(s) is/are resident.
Entities may find examples illustrating how an entity’s residence for tax purposes may be determined in Paragraph 8 of the Commentary on Section VI of the DAC/CRS, concerning due diligence for New Entity Accounts, helpful.