Tax Residence of Individuals within the European Union: Finding New Solutions to Old Problems
- F. Pitrone
- World Tax Journal, 2016 (Volume 8), No 3
- 30 August 2016
The productive and intense discussion on how to tackle tax avoidance and double non-taxation is casting a shadow over a very relevant and still unresolved issue within the European Union: double taxation. The latter is an obstacle that can hamper the effectiveness of the internal market and create tax injustice and, therefore, it should be considered as important as double non-taxation. In this context, when individuals want to exercise their fundamental freedoms in cross-border situations within the European Union, one of the elements that can easily cause double (or multiple) taxation is the concept of tax residence. Against this background, this article is aimed at analysing the obstacles caused by tax residence conflicts concerning individuals within the European Union and at outlining possible solutions to these conflicts. Two solutions are proposed. The first solution is a common definition of tax residence of individuals within the European Union that takes into account either the place from which an individual derives the major part of his income or the place in which the individual spends more than 183 days. The second solution is aimed at accelerating dispute resolution within the European Union: setting up an ad hoc joint commission that would be obliged to solve the problems caused by double or multiple tax residence within a reasonable time frame. The author points out that the latter solution is the most appropriate one in a context that wants to keep relying on the concept of tax residence as a genuine link to exercise the power to tax.