Tax residence

The country in which a person is subject to unlimited tax liability because of residence, stay or other criteria.

In practice

In practice, tax residence is a question of facts – where the permanent home, the family and the centre of vital interests are – not only of the registered address. Where two countries consider a person resident, the double tax treaty decides according to fixed criteria. The family office records each tax residence with its period of validity and informs the banks promptly after any change.

Distinctions and common mistakes

Deregistering in one country does not automatically end tax residence there. A common mistake is to assume that a new address abroad is enough while family, home and business interests remain in the former country.

Related terms

Tax identification number

The number issued by the country of tax residence to identify a taxpayer.

Mentioned in these guides

• Family office software for SwitzerlandWhat Swiss family offices need from software: structures across jurisdictions, AML due diligence, automatic exchange of information and Swiss data storage.
• KYC for trusts: which documents are requiredWhich documents banks and family offices require for a trust: trust deed, letter of wishes, information on settlor, trustee, protector and beneficiaries.
• DAC8 and CARF: reporting of crypto-assetsWhat DAC8 and the OECD Crypto-Asset Reporting Framework mean for family offices holding crypto-assets: timeline in the EU and Switzerland and how to prepare.
• FATCA in Switzerland: what family offices need to knowHow FATCA works in Switzerland, what the Model 2 agreement means, how structures are classified and what the planned move to Model 1 changes for family offices.
• Due diligence obligations under the Swiss Anti-Money Laundering ActDue diligence under the Swiss AMLA: identifying the contracting party, establishing the beneficial owner, special clarifications, records – and practice.
• CRS classification of family structures, step by stepFinancial institution, active or passive NFE? How holdings, foundations and trusts are classified for AEOI/CRS – with a decision path and an example.
• Building the risk profile of a business relationshipStep by step to a robust risk profile: business profile, risk factors, weighting, reasoning and the triggers for a reassessment in a family office.
• Relocating a wealthy family: a checklist for Switzerland, Germany and AustriaWhat wealthy families must consider when moving between Switzerland, Germany and Austria: tax residence, exit tax, succession law, banks, KYC and AEOI.