Do states have to accept Tax Residence Certificates of another country if they have a DTA with each other??

[thedark]

Hi, I am looking for an answer if other states have to accecpt TRCs if they have a DTA with each other?

For example: I live in a country which does not create TRCs with a special remark.

Spain is asking for:

This certificate must expressly state that the taxpayer is a resident within the meaning of the agreement.
Click to expand...

Here is an example how this looks:

Any experience on that topic?

Last edited: Apr 6, 2023

 

[Don]

thedark said:
Hi, I am looking for an answer if other states have to accecpt TRCs if they have a DTA with each other?

For example: I live in a country which does not create TRCs with a special remark.

Spain is asking for:



Here is an example how this looks:

View attachment 4674

Any experience on that topic?
Click to expand...

thedark said:
Hi, I am looking for an answer if other states have to accecpt TRCs if they have a DTA with each other?

For example: I live in a country which does not create TRCs with a special remark.

Spain is asking for:



Here is an example how this looks:

View attachment 4674

Any experience on that topic?
Click to expand...

They should accept it yeah.
Then its up to the "competent authority procedures" to collaborate and dispute it if needed.

 

[thedark]

Are you sure about that? I am looking for real-world experience. Thanks anyway 😉

 

[Fred]

thedark said:
Are you sure about that? I am looking for real-world experience. Thanks anyway 😉
Click to expand...

real world experience answer is: case by case.

We see UAE sometimes not issuing a TRC without further comments despite all requirements full filled.

No state has to if they don't want - it's then a thing of a court to justice.

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[Don]

thedark said:
Are you sure about that? I am looking for real-world experience. Thanks anyway 😉
Click to expand...

In most cases tax residency certificates should include this special remark. Otherwise its less likely to help you to avoid dual tax residency.
Its a question whether the tax residency certificate is issued based on domestic legislation or an international treaty. If it has reference to a DTA then its purpose is to avoid dual tax residency.

 

[thedark]

It's not about the issuing, its about the recognition of an issued TRC from other countries. Like in the example:
State A issue a TRC without the remark, State B is requesting TRC with remark.

My question is why they have a dta in place at all, if they don't trust each others government documents?

Last edited: Apr 6, 2023

 

[Martin Everson]

thedark said:
Hi, I am looking for an answer if other states have to accecpt TRCs if they have a DTA with each other?
Click to expand...

Absolutely not. You can have dual tax residency. Any CRS form will show that you can have more than one tax residency (TIN providing) and both countries can claim you are a tax resident of theirs.

The DTA is there just to make sure the same "income" is not taxed twice. You really need to read the DTA between both countries well and look for any tie-breaker clauses etc.

A TRC is nice to claim tax residency in one country but does not stop the other country saying you are tax resident their also or a dual tax resident hence start digging into DTA clauses.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.