The Fiscal Residence Checker helps tax professionals to identify the country where a person’s income is legally taxable under double-taxation treaties modelled after Art. 15 of the OECD Model Convention. Through an interactive questionnaire that gathers all relevant information, the first step in assessing a person’s tax burden is simplified. This information is then legally analyzed and the applicable fiscal residence is determined as a result. The assessment aims to avoid the burden of double taxation by clearly identifying the country that has the legal right to tax a person’s income.

Background

Under various double taxation treaties, persons who work in one country but are residents in another may avoid double taxation. Therefore, a country’s taxation powers with regard to a person’s income cannot be determined without considering the double-taxation treaty that exists between the two countries. On the basis of the applicable treaty, factors related to the nature of the work such as the number of days he or she spends abroad and the registered address of the employer are considered.  

The Fiscal Residence Checker automates the process of ascertaining which country has taxation powers on a case by case basis. Using BRYTER, the logical structure of double taxation treaties is transformed into a digital decision tree. The user is guided through an interactive questionnaire that collects all the necessary information to determine the respective tax liabilities in different countries. Due to the modular logic of the tool, the final result is based on the user’s inputs and the tool is able to determine tax liabilities for any combination of countries. 

Benefits

Automated & standardized

The Fiscal Residence Checker automatically assesses tax liabilities through a standardized processThis ensures consistent assessments that are independent from the individual user.

Faster execution

The Fiscal Residence Checker identifies the country with taxation powers in a fraction of the time it would take to conduct a manual assessment.

Centralized audit trail

All relevant inputs and triggered decisions of the Fiscal Residence Checker are documented in a centralized audit trail. Users are therefore able to validate the automated results where needed. 

Integrated

The Fiscal Residence Checker can easily be integrated into existing IT infrastructure. Result summaries can be linked to a central system of record or processed by other tools.

Highly customizable

The Fiscal Residence Checker accommodateunique workflows and allows for easy expansion to cover any number of country specific tax regulations and use cases.

How it works

1

Get data

Through a customizable, user-friendly and interactive questionnaire, all relevant input data is collected from the user. With no limitation on the number of countries, users can input any combination of countries and incomes into the tool.

Analyze information

As the tax treaties are transformed into modular logic, the user’s inputs are automatically categorized and a legal assessment of the applicable fiscal residence is provided. The task of assessing the tax liabilities may be linked to other processes, such as sending the result to the taxpayer.

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Keep track

All assessments made through the Fiscal Residence Checker are stored in a central database for future retrieval and documentation purposes. The open architecture of the tool allows new double taxation treaties to be added into the underlying logic to update the tool periodically.