Cross-Border Tax Planning

The 183-day rule is the most EXPENSIVE myth in cross-border tax planning. Countries stopped counting days years ago. Here's what they track instead. Most people think the 183-day rule is universal. Stay under six months, avoid taxes. That's not how it works anymore. ≫ Italy (2024): 183+ days = tax resident. Doesn't matter where your family lives or where your business is. Hit the threshold, you're taxed worldwide. Fractions of days count as full days. ≫ UK (Statutory Residence Test): If you were previously UK resident and have three ties - family, accommodation, work, or 90-day history, you become a tax resident after just 46 days. ≫ Spain: Tax authorities use Instagram posts, credit card data, and phone records to prove presence. Shakira settled for €22 million after they tracked her movements. A 2023 Supreme Court ruling now requires Spain to respect foreign tax certificates under double taxation treaties, but you need that certificate first. ≫ US (Substantial Presence Test): Three-year rolling formula. Current year counts fully, prior year at one-third, two years ago at one-sixth. Spend 120 days/year for three years? That's 180 equivalent days. You're almost a tax resident without ever hitting six months. The solution isn't avoiding residency, it's choosing the right one. Countries like Panama, Paraguay, and UAE offer territorial tax systems. Italy and Switzerland have flat-tax regimes. Get a tax residency certificate. It unlocks treaty protections and gives you legal standing when conflicts arise. The 183-day rule still exists. But ties, economic interests, and multi-year formulas now matter more than simple day-counting. Which country are you spending the most time in this year?

Cross-Border WFH & Permanent Establishment: What the 2025's OECD Update Says OECD has published the 2025 update to the OECD Model Tax Convention, approved by the Committee on Fiscal Affairs on 13 October 2025 and by the OECD Council on 18 November 2025. A key highlight: important clarifications in Article 5 Commentary on when an individual’s home can become a “place of business” of the enterprise. Here’s a simplified take: a. Not every home office = PE An employee working from home in another country does not automatically create a Permanent Establishment. b. Key tests still apply: Permanence - Is the place used regularly and continuously? Business use - Is the home truly functioning as a place of business? Nature of activities - Are they core, or merely preparatory/auxiliary? c. 50% Working-Time Guideline If the employee works less than 50% of their total time from the overseas location in a 12-month period - generally no PE. If 50% or more, then a deeper factual review is needed. - The “Commercial Reason” Test – the critical determinant PE risk increases if the employee's presence facilitates business in that country, such as: meeting customers or suppliers, building/servicing a local client base, managing vendor relationships, sourcing or developing business opportunities If the WFH arrangement exists only due to employee preference or cost-saving, not business need - No PE. - Intermittent / incidental interactions: occasional meetings or light-touch activity in that country are not enough to trigger a PE. Bottom Line: The 2025 OECD Update makes one thing clear: Cross-border WFH does not automatically create a tax presence - but sustained, business-driven, on-ground activity can. A timely reminder for multinationals to revisit their remote work, global mobility, and PE risk frameworks. #OECD #OECD2025Update #ModelTaxConvention #PermanentEstablishment #Article5 #CrossBorderWork #RemoteWorkTax #GlobalMobility #InternationalTax #TaxPolicy #TransferPricing #BEPS #GlobalTax #CorporateTax #TaxUpdates #WFHCompliance

A genuinely ground-breaking update in the world of international remote work compliance has just landed from the OECD. The 2025 Update to the OECD Tax Model Tax Convention finally gives clearer direction on how cross-border home working should be treated for tax treaty purposes. One of the biggest shifts is the new guidance in the Commentary to Article 5 on when working from home in another jurisdiction might create a fixed place of business permanent establishment. It is not a free pass and it does not remove permanent establishment risk altogether, but it does bring some long overdue common sense into an area that has frustrated corporate tax teams for years. Here are five takeaways from the new guidance: ✔️ If someone works from home in another country for less than half of their working time across a year, then in most cases it will not create a permanent establishment. ✔️ Even if they spend more than half their time working from abroad, that still does not automatically create a permanent establishment. What matters is what they actually do there. ✔️ If the employee is abroad purely for personal reasons and the company has no real business need for them to be in that country, the risk is generally low. ✔️ Just using a home office regularly does not make it a permanent establishment unless it genuinely becomes part of how the business operates. ✔️ What really counts is the overall story: how often the employee works there, what they do, and whether their work in that location meaningfully drives the company’s business in that country. A key point worth highlighting is that every request still needs to be assessed on a case-by-case basis. No two situations are identical. But this updated OECD guidance does meaningfully reduce the level of risk for arrangements involving OECD countries. For many organisations, this update could ease a lot of internal tension. If your tax team is still declining international remote work requests purely because of permanent establishment concerns, it is worth sharing this guidance with them if they have not reviewed it yet. Of course you still need proper safeguards and structure in place. If you want to see how we approach that with our own award-winning Work From Anywhere platform, I would be happy to walk you through it. Our view is that this guidance puts modern WFA frameworks and policies firmly centre stage as a powerful driver of employee retention. If your legal or tax teams are still saying no by default, now is the time to challenge that position and show that there is a balanced way to do WFA. 🔗 https://lnkd.in/dYKXgGzf

Tax treaties vs. domestic fictions: who wins? When a domestic tax fiction meets an international tax treaty, who prevails? That was the core issue in the Rubis decision by the French Conseil d’État. At stake: article 209 B of the French tax code—our CFC (Controlled Foreign Corporation) provision. Before 2005, the CFC rule attributed profits of low-tax subsidiaries directly to the French parent company. This logic clashed with tax treaties—especially article 7 (business profits)—as confirmed in the Schneider Electric case. In 2005, the wording was rewritten: instead of direct attribution, the profits are now “deemed distributed” as dividends. Fiction, yes—but structured fiction. Result? In Rubis (2025), the Conseil d’État upheld France’s right to tax under article 22 of the France–Mauritius treaty, covering “other income.” 💡 Why does this matter? Because the way tax fictions are framed—attributed vs. deemed distributed—can shift the applicable treaty article and the taxing rights. This is where treaty logic and domestic structuring collide. The real game is not just in the numbers—it’s in how the fiction is written. What can we learn from this? ✅ The legal formulation of a fiction matters as much as its fiscal effect. ✅ Tax treaties don’t override national fictions—they interpret them. ✅ Strategic wording can turn a rejected tax mechanism into a validated one. And most importantly: → In cross-border taxation, drafting is strategy. I am a tax lawyer and partner at Vatiris Avocats. I help international entrepreneurs and HNWIs secure their tax residency and structure their wealth worldwide—with clarity, foresight, and resilience. If your tax strategy involves more than one jurisdiction, let’s make sure it also speaks more than one legal language.

Fiduciary Masterclass: The Role of Trusts in Cross-Border Estate Planning Today’s families don’t live in one place. Mine certainly doesn't. Their assets don’t either. A founder may live in Geneva, own flats in London, run a business in Kenya, and have children studying in Boston and Berlin. What they share in blood, they may lack in tax residency, marital regime, or legal inheritance rights. In such cases, the challenge isn’t wealth. It’s finding coherence. That’s where a trust, when it's properly established and professionally administered, becomes not just useful but vital. It offers a means to unify, preserve, and transition wealth across jurisdictions in a way that national law simply cannot. Let’s be clear: this is not about hiding money. It’s about safeguarding intent. Without a structure in place, cross-border succession becomes vulnerable to: Conflicting legal systems: Civil law vs common law. Forced heirship rules vs testamentary freedom. A will drafted in English may mean little in France. A local court may ignore it altogether. Multiple probate processes: a death in one country can trigger legal proceedings in three or more others. That can mean delay, public exposure, and loss of control. Inheritance tax mismatches: some countries tax based on domicile. Others on residency, citizenship, or situs of the asset. A single estate can be taxed twice (or not at all) depending on how it’s structured. Asset type diversity: an estate with operating companies, real estate, pensions, and digital assets doesn’t fit neatly into a national succession framework. And beneficiaries often want different things, whether it's income, control, simplicity, or distance. Family geography: modern families are global. A trust can apply consistent rules, even when beneficiaries live under different systems of law and expectation. Used wisely, a trust offers: 1. Continuity: assets don’t pass through probate processes. The trust keeps running. 2. Privacy: distributions are private, not published. 3. Protection: against claims, disputes, or poorly written wills. 4. Flexibility: trustees can respond to changing needs over time, not just at death. But this must be done properly. A badly drafted trust can create more problems than it solves. And cross-border planning without local advice is a risk no serious fiduciary takes. At its best, a trust is a bridge. Between generations. Between jurisdictions. Between complexity and clarity. It’s not a replacement for the law; it’s just a tool to work with it across the uneven terrain of international life. As families globalise, estate planning must globalise with them. And trustees, above all, must understand that legacy isn’t what you leave behind. It’s how well you prepare the path forward. This is one of my Fiduciary Masterclass reflections. For a fuller picture of trusteeship, see my book “Trust: The Skill of Trusteeship in 16 Success Stories and 1 Failure”. Order it here: https://amzn.eu/d/bXp6aKz

A client asked: "If I fly from Cyprus to Portugal and then just drive into Spain, how will they (tax authority) know?" Fair question. There's no border between Portugal and Spain, so how would Spain find out, right? By the way in case you're missing this - the question comes from a person who wants to set up his residence in Cyprus to pay 0% tax but clearly wants to spend most of his time in Spain. My answer was: "You'd be very surprised as to just how much they know about you." Most people know that credit card statements, flight tickets and utility bills can all be looked into to find out where you're really tax resident, but I'll mention something here that might catch some of you off guard: Your phone. It can get tracked, too... your roaming data, the general location of the closest antennas you're connected to. This level of scrutiny used to be reserved for the wealthiest taxpayers but we now have many reports of "modest" cases where contributors get audited over tax bills as low as €20,000. -------------- Point is - if you're looking into international tax planning, your strategy needs to be compliant and carefully designed so it does not crumble apart with an audit.

Non-residents receiving Canadian pension or retirement income often assume the tax withheld at source is the end of the story. In many cases, it is not. The Section 217 election under the Canada Income Tax Act can allow eligible non-residents to file a Canadian return and have certain Canadian-source retirement income taxed using graduated rates instead of a flat withholding tax. When it applies, the result can be a refund of over-withheld tax and a more accurate tax outcome. In this article, we break down how Section 217 works, who it is for, the filing steps, the June 30 deadline, and the planning reasons this election is worth reviewing as part of a cross-border retirement strategy. Read Full Article Here: https://lnkd.in/gKRM635v #49thParallelWealthManagement #CrossBorderAdvice #TaxInsights #TaxCompliance #CanadaTax

Family Offices with Global Footprints Just Became Law Firms' Most Profitable Clients Most think family offices operate in one jurisdiction The real story? 57% of family offices have family members living in multiple countries, creating a compliance nightmare that requires specialist legal coordination. The Multi-Jurisdiction Reality: Modern families layer 3-4 jurisdictions for different functions: → Ireland SPV for governance (12.5% corporate tax, stable since 1997) → Portugal residency (NHR 2.0: 20% flat tax, only 7-14 days/year required) → Luxembourg holdings (0.25% subscription tax, €654M average AUM) → Delaware entities for US structuring (zero state tax on non-Delaware income) The Legal Complexity Explosion: Succession Planning Across Borders: Wills, trusts, forced heirship rules (civil law vs common law conflicts) Tax Compliance: Automatic exchange of information (AEOI), FATCA, CRS reporting across jurisdictions Corporate Transparency Act (CTA): Beneficial ownership reporting for US entities (2024 deadline created backlog) AML Compliance: Cross-border rules making offshore accounts nearly impossible for US citizens Employment Law: Household staff compliance across multiple countries The Numbers: - 62% of family offices cite geopolitical issues as their biggest challenge (2024) - 74% list tax planning as top concern for non-domiciled family members - 68% cite estate planning complexity for cross-border families - $6T managed globally by 7,000+ family offices, most spanning multiple jurisdictions The Advisory Gap: Family offices need local legal expertise in each jurisdiction plus a coordinating counsel who understands how the pieces fit together. One Spanish family: Dublin-based holding company + Lisbon residency + Delaware LLC + Jersey trust. That's four legal teams minimum, plus one firm coordinating strategy, governance, and compliance across all of them. Are you positioned as the coordinating counsel, or just one of the local providers? References: New frontiers for family offices: emerging issues for cross-border family office structures and investments | International Bar Association - https://lnkd.in/dqneZWJ5 The global family office: Navigating distance, identity and cross-border complexity | Crain Currency - https://lnkd.in/dpXzCxRw Key Family Office Risks (& Opportunities) in 2025 | TwinFocus - https://lnkd.in/dT4tcYTn