Digital Nomad Tax & Residency Glossary

Accidental American — An Accidental American is an informal label for a United States citizen by birth living abroad with few US ties, yet subject to citizenship-based taxation.
Active NFE — An Active NFE is a Common Reporting Standard classification for non-financial entities, as transposed into national law, whose income and assets are mainly non-passive.
Advance Pricing Agreement (APA) — An Advance Pricing Agreement (APA) is a transfer pricing arrangement under which a taxpayer and tax authorities agree in advance on methods for related-party transactions.
Agency Permanent Establishment — An Agency Permanent Establishment is a taxable presence created when a dependent agent habitually concludes contracts for a foreign enterprise, under treaty and national criteria.
Anti-Abuse Rule — An Anti-Abuse Rule is a tax provision under which authorities disregard arrangements whose main purpose is obtaining a tax advantage contrary to the law's object.
Anti-Hybrid Rule — An Anti-Hybrid Rule is a corporate tax provision which neutralises mismatches arising when two countries classify the same entity, instrument or payment differently.
Anti-Inversion Rule — An Anti-Inversion Rule is a corporate tax provision which restricts benefits when a domestic company is placed beneath a foreign parent, as national law defines.
Anti-Treaty Shopping Rule — An Anti-Treaty Shopping Rule is a tax treaty anti-abuse provision under which benefits are denied to arrangements designed principally to access a more favourable treaty.
Arm's Length Principle — The Arm's Length Principle is a transfer pricing standard under which dealings between associated enterprises are priced as between independent parties in comparable circumstances.
Artificial Avoidance — Artificial Avoidance refers to an anti-avoidance concept covering non-genuine arrangements set up mainly for a tax advantage which defeats the purpose of applicable tax law.
Associated Enterprise — An Associated Enterprise is a tax category for an entity linked to another by ownership, control or management, under treaty and national law criteria.
Attribution of Profits — Attribution of Profits refers to the international tax process determining which share of an enterprise's profits is taxable through a permanent establishment abroad.
Automatic Exchange of Information (AEOI) — Automatic Exchange of Information (AEOI) is a tax transparency mechanism under which authorities share predefined financial and income data at regular intervals without prior request.
Base Erosion and Anti-Abuse Tax (BEAT) — The Base Erosion and Anti-Abuse Tax (BEAT) is a United States federal minimum tax on large corporations making deductible payments to related foreign persons.
Base Erosion and Profit Shifting (BEPS) — Base Erosion and Profit Shifting (BEPS) refers to corporate tax planning which exploits gaps and mismatches between tax rules to shift profits to low-tax jurisdictions.
Beneficial Ownership — Beneficial Ownership is a concept identifying who ultimately owns, controls or enjoys income from assets, with criteria set separately by anti-money-laundering law and tax treaties.
Black List — A Black List is an official list of jurisdictions judged non-cooperative for tax purposes, with criteria and consequences set by the EU or national law.
Bona Fide Residence Test — The Bona Fide Residence Test is a US criterion under which genuine foreign residence for a full tax year supports the foreign earned income exclusion.
Branch Profits Tax — Branch Profits Tax is a corporate tax on profits deemed repatriated by a foreign company's local branch, with base and rate set by national law.
Capital Gains Tax (CGT) — Capital Gains Tax (CGT) is a tax on profit realised on the disposal of an asset, with rates and exemptions set by national law.
CbCR (Country-by-Country Reporting) — Country-by-Country Reporting (CbCR) is a transfer pricing disclosure obligation under which large multinational groups report key financial data to tax authorities for each jurisdiction.
Central Management and Control — Central management and control is a common-law test of company tax residence which locates a company where the highest-level strategic decisions are actually taken.
Centre of Vital Interests — Centre of vital interests is a treaty tie-breaker criterion which assigns residence of a dual-resident individual to the state with closer personal and economic relations.
Certificate of Tax Residence — A Certificate of Tax Residence is an official tax administration document confirming residence for treaty relief, issued under procedures set by national law.
CFC Income — CFC income refers to undistributed profits of a controlled foreign company which anti-deferral rules, defined by national law, attribute to resident controlling shareholders.
CFC Rules — CFC Rules are international tax anti-avoidance provisions under which resident shareholders are taxed on certain undistributed profits of controlled foreign entities, as national law defines.
CFC Subpart F Income — CFC Subpart F Income is a United States tax category of mostly passive or mobile controlled foreign corporation income, which United States shareholders include currently.
Check-the-Box — Check-the-Box refers to the United States entity classification regime under which an eligible business entity elects corporate, partnership or disregarded status for federal tax purposes.
Citizenship-Based Taxation — Citizenship-Based Taxation is a tax system under which a country taxes citizens on worldwide income regardless of residence, applied chiefly under United States federal law.
Common Reporting Standard (CRS) — The Common Reporting Standard is an OECD tax transparency standard under which financial institutions report non-resident account holders' data for automatic exchange between tax authorities.
Competent Authority — A Competent Authority is the official or office designated under a tax treaty to administer provisions, resolve disputes and exchange information, as each treaty specifies.
Conduit Company — A Conduit Company is an intermediate entity in international tax structures which receives income and passes most of the income onward to another person.
Controlled Foreign Company (CFC) Substance Carve-Out — The CFC Substance Carve-Out is an anti-avoidance exception under which income of genuinely active foreign entities is excluded from CFC attribution, subject to national law.
Controlled Foreign Corporation — A Controlled Foreign Corporation is a tax classification for foreign companies controlled beyond a statutory threshold by domestic shareholders, with criteria set by national law.
Corporate Inversion — A Corporate Inversion is a cross-border tax restructuring under which a domestic parent company becomes a subsidiary of a foreign parent, as national law defines.
Corporate Migration — Corporate Migration refers to a cross-border corporate law and tax process under which a company relocates a registered office or tax residence to another jurisdiction.
Corporate Residence — Corporate Residence refers to the tax status under which a company is resident in a jurisdiction, based on incorporation or management criteria under national law.
Covered Expatriate — A Covered Expatriate is a United States tax status, defined in federal law, for certain former citizens and long-term residents subject to expatriation tax rules.
Cross-Border Pension Transfer — A Cross-Border Pension Transfer is a retirement-savings operation moving accrued pension rights from a domestic scheme to a foreign scheme, subject to national law.
Cross-Border Tax Planning — Cross-Border Tax Planning refers to the lawful organisation of residence, entities and income flows across jurisdictions, conducted within domestic law, tax treaties and anti-abuse rules.
Cross-Border Worker — A Cross-Border Worker is a tax and employment category for a person working in one country while residing in another, as defined by national law.
Deemed Disposal — A Deemed Disposal is a tax-law fiction under which assets are treated as sold at market value without a sale, upon events national law defines.
Dependent Agent — A Dependent Agent is a person acting for a foreign enterprise whose habitual contracting activity can create a treaty permanent establishment, as each treaty defines.
Digital Nomad Visa (DNV) — A Digital Nomad Visa (DNV) is an immigration permit under which foreign remote workers live in a host country while working for clients abroad.
Digital Permanent Establishment — A Digital Permanent Establishment is a proposed tax nexus concept under which user-based digital activity, without physical premises, creates taxable business presence in a jurisdiction.
Digital Services Tax (DST) — A Digital Services Tax (DST) is a tax on large groups' gross revenues from specified digital activities linked to local users, as national law defines.
Directive on Administrative Cooperation — The Directive on Administrative Cooperation is an EU tax transparency law under which Member States exchange taxpayer information, applied through national transposing legislation.
Disregarded Entity (US Single-Member LLC) — A Disregarded Entity refers to a United States tax classification under which a single-owner business entity, typically an LLC, is ignored for federal income tax.
Dividend Withholding Tax — Dividend Withholding Tax is a source-country tax deducted from dividends paid to shareholders, with rates set by national law and often reduced by treaties.
Double Tax Treaty (DTT) — Double Tax Treaty (DTT) refers to a bilateral international tax agreement which allocates taxing rights over cross-border income between contracting states and relieves double taxation.
Double Taxation — Double Taxation refers to the international tax situation in which several jurisdictions levy comparable taxes on the same income, gains or capital.
Double Taxation Relief — Double Taxation Relief refers to treaty and domestic tax mechanisms, mainly credits and exemptions, under which a country reduces tax on income already taxed abroad.
Dual Resident — Dual Resident refers to the tax status of a person treated as resident by two countries under domestic laws, generally resolved through treaty tie-breaker rules.
Dual Status Alien — Dual Status Alien is a United States tax classification for a non-citizen who is a resident and a nonresident alien within one tax year.
Economic Double Taxation — Economic Double Taxation refers to taxation of the same income in the hands of two different taxpayers, typically a company and a dividend-receiving shareholder.
Economic Employer — An Economic Employer refers to an international tax concept identifying the entity which benefits from, controls and bears the cost of cross-border employment services.
Economic Presence — Economic Presence refers to a tax nexus concept under which market activity, rather than physical facilities, gives a country taxing rights over business profits.
Economic Substance — Economic Substance refers to the anti-avoidance principle under which tax authorities recognise an entity or transaction only where real activity or genuine non-tax purpose exists.
Effective Connected Income (ECI) — Effective Connected Income (ECI), statutorily effectively connected income, refers to United States tax income of foreign persons linked with a United States trade or business.
EIN (Employer Identification Number) — An EIN (Employer Identification Number) is a United States federal tax identification number issued by the IRS to businesses, trusts, estates and other entities.
Employer of Record — An Employer of Record is a third-party employment arrangement under which a provider formally employs a worker for a client, subject to national law.
Entity Classification — Entity Classification refers to the tax law framework under which a business entity is treated as a corporation, partnership or disregarded entity, following national rules.
Estate Tax — Estate Tax is a succession tax charged on the total value of a deceased person's estate, with thresholds and rates set by national law.
EU Anti-Tax Avoidance Directive (ATAD) — The EU Anti-Tax Avoidance Directive (ATAD) is a European Union corporate tax directive setting minimum anti-abuse rules, which each Member State transposes into national law.
EU Blacklist — The EU Blacklist is a European Union tax governance list of non-EU jurisdictions which the Council considers non-cooperative on transparency, fair taxation or BEPS standards.
EU Greylist — The EU Greylist refers to Annex II of the European Union tax list, naming cooperating non-EU jurisdictions which have committed to pending tax governance reforms.
EU Mandatory Disclosure — EU Mandatory Disclosure refers to a European Union reporting obligation under which intermediaries or taxpayers report potentially aggressive cross-border tax arrangements to national tax authorities.
Exchange Control — Exchange Control refers to government or central bank restrictions on converting and transferring currency and capital across borders, with scope set by national law.
Exchange of Information — Exchange of Information refers to administrative cooperation under which tax authorities of separate jurisdictions share taxpayer data foreseeably relevant to enforcing domestic tax laws.
Exchange of Information on Request — Exchange of Information on Request refers to a tax cooperation procedure under which one jurisdiction's tax authority asks another for information on identified taxpayers.
Exit Tax — Exit Tax refers to a charge on unrealised gains under which national law treats assets as disposed of when a taxpayer leaves the taxing jurisdiction.
Expatriate — Expatriate refers to a person living outside the country of citizenship or former residence, a general mobility term which some tax laws define more narrowly.
Expatriate Tax Equalisation — Expatriate Tax Equalisation is an employer compensation policy under which an internationally assigned employee bears the home-country tax cost while the employer pays actual taxes.
Expatriation — Expatriation refers to the act of leaving a country of citizenship or residence, which United States tax law defines as relinquishing citizenship or long-term residence.
Expatriation Tax — Expatriation Tax is a United States tax regime under which citizens and long-term residents giving up status may face a deemed sale of worldwide assets.
Family Office — A Family Office is a private wealth management organisation serving one or several wealthy families, with regulatory and tax treatment depending on national law.
FATCA (Foreign Account Tax Compliance Act) — FATCA (Foreign Account Tax Compliance Act) is a United States tax reporting law under which foreign financial institutions and United States persons disclose foreign accounts.
Favourable Tax Regime — A Favourable Tax Regime is a tax measure granting defined taxpayers or income a lower burden than generally applies, assessed under national and international criteria.
Fixed Place of Business — A Fixed Place of Business is a permanent establishment test under which a durable business location creates taxable presence, subject to treaties and national law.
Flat Tax — A Flat Tax is an income tax system charging taxable income at one single rate instead of progressive brackets, with design set by national law.
Foreign Branch — A Foreign Branch is an unincorporated unit through which a company operates abroad, generally taxed there as a permanent establishment under treaty and national rules.
Foreign Corporation — A Foreign Corporation is a company classification in tax law for a corporation organised outside the taxing country, with criteria set by national law.
Foreign Earned Income Exclusion — The Foreign Earned Income Exclusion is a United States tax election under which qualifying citizens and residents abroad exclude capped foreign earned income.
Foreign Financial Institution (FFI) — A Foreign Financial Institution is a non-United States bank, custodian or investment entity subject to FATCA reporting on accounts held by United States persons.
Foreign Grantor Trust — A Foreign Grantor Trust is a US tax classification for a non-domestic trust whose income is taxed to the grantor under grantor trust rules.
Foreign Housing Exclusion — The Foreign Housing Exclusion is a US income tax relief under which qualifying citizens and residents abroad exclude employer-funded housing costs above a base amount.
Foreign Investment in Real Property Tax Act (FIRPTA) — The Foreign Investment in Real Property Tax Act is a US federal tax law taxing foreign persons on dispositions of US real property interests.
Foreign Source Income — Foreign Source Income is a tax classification for income deemed to arise outside the taxing country, with sourcing criteria set by national law and treaties.
Foreign Tax Credit (FTC) — A Foreign Tax Credit (FTC) is a double taxation relief under which foreign income tax offsets home-country tax on the same income, within national-law limits.
Foreign Trust — A Foreign Trust is a trust classed as non-resident, which under United States tax rules means any trust failing the court or control test.
Form 5471 — The Information Return of US Persons With Respect to Certain Foreign Corporations is an IRS tax filing reporting officers', directors' and shareholders' foreign company data.
Form 8621 — The Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund is an IRS filing reporting PFIC holdings and elections.
Form 8832 — The Entity Classification Election form is an IRS filing under which an eligible business entity chooses corporate, partnership or disregarded status for US federal purposes.
Form 8938 — The Statement of Specified Foreign Financial Assets is a US FATCA disclosure form under which specified individuals and certain entities report foreign assets above thresholds.
Form W-8 — The IRS foreign status certificate series refers to United States withholding forms under which foreign persons document non-US status and claim treaty-reduced withholding.
Form W-8BEN — The Certificate of Foreign Status of Beneficial Owner for Individuals is a US withholding form confirming an individual's non-US status and eligibility for treaty rates.
Form W-8BEN-E — The beneficial owner certificate for entities is an IRS withholding form under which a foreign entity documents foreign status, FATCA status and any treaty claim.
Form W-8ECI — The ECI withholding certificate is an IRS form under which a foreign beneficial owner declares US-source income effectively connected with a US trade or business.
Form W-8EXP — The foreign government and organization withholding certificate is an IRS form under which foreign governments, central banks and foreign tax-exempt bodies claim US withholding exemptions.
Form W-8IMY — The foreign intermediary withholding certificate is an IRS form under which intermediaries, flow-through entities and certain US branches document status for US withholding purposes.
Form W-9 — The Request for Taxpayer Identification Number and Certification is an IRS form under which a US person provides a taxpayer identification number to a requester.
Free Zone — A free zone is a designated area of a national territory where goods and businesses receive special customs, tax or regulatory treatment under national law.
GAAR (General Anti-Avoidance Rule) — GAAR (General Anti-Avoidance Rule) is an anti-abuse provision under which tax authorities disregard non-genuine, mainly tax-driven arrangements, under criteria set by national law.
Gains from Alienation — Gains from Alienation is a tax treaty category covering profits from selling or otherwise disposing of property, allocated between contracting states under treaty rules.
Gift Tax — Gift Tax is a wealth transfer tax charged on lifetime gratuitous transfers of property, with the taxpayer, exemptions and rates set by national law.
Global Intangible Low-Taxed Income (GILTI) — Global Intangible Low-Taxed Income (GILTI) is a US anti-deferral regime under which US shareholders of controlled foreign corporations include certain foreign earnings in current income.
Global Minimum Tax — Global Minimum Tax is an international corporate tax framework under which large multinational groups owe top-up tax on profits taxed below an agreed minimum rate.
Golden Visa (Residence by Investment) — Golden Visa (Residence by Investment) is an immigration programme granting residence rights in exchange for a qualifying investment, under conditions set by national law.
Green Card Test — Green Card Test is a US tax residency rule under which any lawful permanent resident during a calendar year is treated as a resident alien.
Habitual Abode — Habitual Abode is a tax residency concept describing where an individual regularly lives, used in treaty tie-breakers and some national residence tests.
High Net Worth Individual (HNWI) — A High Net Worth Individual (HNWI) is a wealth-management and tax-administration classification for a person whose income or assets exceed thresholds set by each institution.
Holding Company — A Holding Company is a group-structuring entity whose core activity is owning shares in other companies, with tax treatment set by national law.
Hybrid Mismatch Rule — A Hybrid Mismatch Rule is an anti-abuse provision in international tax law which neutralises gaps arising when countries classify the same entity or instrument differently.
Immovable Property — Immovable Property is a tax-treaty and property-law category covering land, buildings and attached rights, with the precise meaning set by national law where situated.
Independent Personal Service — Independent Personal Service is a tax-treaty income category covering professional or self-employed activity, under which the residence country generally taxes fees unless treaty conditions apply.
Individual Taxpayer Identification Number (ITIN) — An Individual Taxpayer Identification Number (ITIN) is a United States tax-processing identifier issued by the IRS to individuals ineligible for a Social Security Number.
Inheritance Tax — Inheritance Tax is a transfer tax on assets passing on death, with rates, exemptions and the connecting factors for liability set by national law.
Intergovernmental Agreement (IGA) — An Intergovernmental Agreement (IGA) is a bilateral treaty-level arrangement under which a partner jurisdiction and the United States implement FATCA account reporting by financial institutions.
International Tax — International Tax refers to the body of domestic rules and treaty provisions under which states tax income, gains and assets crossing national borders.
Limitation on Benefits (LOB) — Limitation on Benefits (LOB) refers to an anti-treaty-shopping provision in tax treaties under which only residents meeting ownership, listing or activity tests obtain treaty benefits.
Limited Tax Liability — Limited Tax Liability is a taxpayer status under which a non-resident is taxed only on domestic-source income, with the scope defined by national law.
Main Purpose Test — Main Purpose Test refers to an anti-abuse standard denying a tax advantage when securing the advantage was a main purpose of an arrangement.
Multilateral Instrument (MLI) — The Multilateral Instrument (MLI) is a multilateral tax convention under which participating jurisdictions modify existing bilateral double tax treaties to add anti-abuse and dispute-resolution measures.
Mutual Agreement Procedure (MAP) — The Mutual Agreement Procedure (MAP) is a treaty dispute-resolution mechanism under which competent authorities consult to eliminate taxation not in accordance with a tax treaty.
Non-Resident — A Non-Resident is a tax status for a person or entity failing a country's domestic residence criteria, generally taxed only on local-source income.
Non-Resident Alien — A Non-Resident Alien is a US tax classification for a non-citizen meeting neither the green card test nor the substantial presence test under federal law.
Non-Resident Capital Gains Tax — Non-Resident Capital Gains Tax is a UK tax charge on gains which non-resident individuals and trustees realise when disposing of UK property or land.
Non-Resident Landlord Scheme — The Non-Resident Landlord Scheme is a UK collection mechanism under which letting agents or tenants deduct income tax from rent paid to landlords living abroad.
Non-Resident Tax Return — A Non-Resident Tax Return is a compliance filing in which a non-resident reports income sourced in a country, with filing triggers set by national law.
Non-Resident Trust — A Non-Resident Trust is a trust treated as resident abroad for tax purposes, typically under trustee and settlor residence criteria set by national law.
Non-Resident Withholding Tax — Non-Resident Withholding Tax is a source-country collection mechanism under which a payer deducts income tax from dividends, interest, royalties or similar payments made to non-residents.
NRO Account — An NRO Account is an Indian rupee bank account for non-residents under Indian exchange-control rules, holding income arising in India such as rent or dividends.
OECD Model Convention — The OECD Model Convention is a non-binding tax treaty template with official commentary, which countries use when negotiating bilateral double tax treaties.
Offshore Account — An Offshore Account is a bank or investment account held outside the holder's country of tax residence, generally lawful but subject to reporting rules.
Offshore Finance Centre — An Offshore Finance Centre is a jurisdiction whose financial sector mainly serves non-residents, with external assets and liabilities large relative to domestic financial activity.
Overseas Pension — An overseas pension is a retirement savings arrangement registered outside the holder's country of tax residence, with taxation set by domestic law and tax treaties.
Participation Exemption — A participation exemption is a corporate tax relief under which a parent company excludes subsidiary dividends or share gains from taxable profit under national conditions.
Passive Foreign Investment Company (PFIC) — A Passive Foreign Investment Company (PFIC) is a US tax classification for a non-US corporation whose income or assets are predominantly passive under statutory tests.
Permanent Establishment (PE) — A permanent establishment (PE) is a treaty concept denoting a fixed place of business or dependent agent through which a foreign enterprise becomes locally taxable.
Permanent Establishment Risk — Permanent establishment risk refers to the exposure of a foreign enterprise to host-country tax when local staff, agents or premises may constitute a taxable presence.
Permanent Residence — Permanent residence is an immigration status granting a foreign national an indefinite right to live in a country, distinct from tax residency under national law.
Personal Income Tax — Personal Income Tax is a direct tax on the income of individuals, with taxable base, rates and residence criteria set by national law.
Physical Presence Test — The Physical Presence Test is a US tax eligibility test under which citizens and residents qualify for the foreign earned income exclusion through days abroad.
Pillar One — Pillar One is an OECD-led tax reform framework which reallocates part of the taxing rights over the profits of large multinational groups to market jurisdictions.
Pillar Two — Pillar Two is a global minimum taxation framework under which large multinational groups pay top-up tax where profits are taxed locally below a minimum rate.
Place of Effective Management (POEM) — Place of Effective Management (POEM) is a corporate tax residence test, used in treaties and some national laws, identifying where key management decisions are made.
Principal Purpose Test — The Principal Purpose Test is an anti-abuse rule which denies tax treaty benefits where obtaining a benefit was a principal purpose of an arrangement.
QEF Election — A QEF Election is a US tax election under which a passive foreign investment company shareholder reports pro rata fund earnings annually.
QI Agreement — A QI Agreement is a US withholding contract under which a foreign intermediary agrees with the IRS to document, withhold and report on US-source payments.
Qualified Domestic Trust (QDOT) — A Qualified Domestic Trust (QDOT) is a US estate-tax trust which preserves the marital deduction for property left to a non-citizen surviving spouse.
Qualified Intermediary (QI) — A Qualified Intermediary (QI) is a US withholding-tax status held by a foreign financial institution which has signed a QI Agreement with the IRS.
Redomiciliation — Redomiciliation refers to a corporate-law procedure under which a company transfers a registered office to another jurisdiction while keeping legal personality, where national law permits.
Relocation — Relocation refers to the physical move of an individual or business between countries, which may change tax residence status according to each country's national rules.
Remittance Basis — The Remittance Basis is a personal taxation method under which foreign income and gains are taxed only when brought into the country of residence.
Report of Foreign Bank and Financial Accounts (FBAR) — The Report of Foreign Bank and Financial Accounts (FBAR) is a US information return under which US persons disclose foreign accounts above a statutory threshold.
Reportable Account — A Reportable Account is a financial account category under the Common Reporting Standard, held by reportable persons, which financial institutions report to tax authorities.
Resident Alien — A Resident Alien is a US tax classification for a non-citizen who meets the green card test or the substantial presence test under federal law.
Resident Company — A Resident Company is a corporate entity treated as tax resident in a jurisdiction under national criteria such as incorporation or central management and control.
Shadow Payroll — Shadow Payroll refers to a payroll reporting mechanism under which a host-country entity reports and withholds tax on pay delivered by a foreign employer.
Shell Company — A Shell Company is a legal entity with little or no operational substance, used as a holding or conduit vehicle in corporate and tax contexts.
Social Security Totalisation Agreement — A Social Security Totalisation Agreement is a bilateral social insurance treaty which assigns contribution liability to one country and combines insurance periods for cross-border workers.
Source Country — A Source Country is the state in international taxation where income arises, which may tax non-residents on such income under domestic law and treaties.
Source of Income — Source of Income refers to the international tax rules which locate where an item of income arises, with criteria set by national law and treaties.
Source Taxation — Source Taxation refers to the international tax principle under which a country taxes income arising within national territory, including income earned by non-residents.
Special Economic Zone (SEZ) — A Special Economic Zone (SEZ) is a designated area under national law with customs, tax and investment rules distinct from the wider country.
Split-Year Treatment — Split-Year Treatment is a tax residency mechanism under which a year of arrival or departure is divided into resident and non-resident parts, following national law.
Statutory Residence Test — The Statutory Residence Test is the United Kingdom's legislative framework for deciding individual tax residence for each tax year, combining day counts with connecting ties.
Streamlined Filing Compliance Procedure — The Streamlined Filing Compliance Procedure is an IRS compliance programme under which US taxpayers with non-willful unreported foreign income file overdue returns and FBARs.
Substantial Presence Test — The Substantial Presence Test is a US federal tax residency rule under which foreign nationals become resident aliens through a weighted count of physical-presence days.
Superannuation — Superannuation is Australia's compulsory retirement savings system under which employers pay a legislated percentage of earnings into regulated funds held for later release.
Tax Evasion — Tax evasion is a criminal offence under national law under which a person deliberately conceals income or facts to escape a legally owed tax.
Tax Haven — A tax haven is an informal international taxation label for a jurisdiction combining low or nominal taxation with limited transparency, assessed differently by official lists.
Tax Holiday — A tax holiday is a temporary tax incentive under which a government reduces or suspends corporate or other taxes for qualifying investors, activities or regions.
Tax Home — Tax home is a US federal tax concept for the general area of a taxpayer's main place of business, employment or post of duty.
Tax Identification Number (TIN) — A Tax Identification Number (TIN) is an administrative identifier which a tax authority assigns to individuals or entities, under formats set by national law.
Tax Incentive — A tax incentive is a fiscal policy measure under which a government reduces tax liability for targeted activities or investors, subject to national law.
Tax Information Exchange Agreement (TIEA) — A Tax Information Exchange Agreement (TIEA) is a bilateral international tax agreement under which jurisdictions cooperate by exchanging information relevant to enforcing domestic tax laws.
Tax Jurisdiction — A tax jurisdiction is a territory or authority with legal power to levy taxes on persons and income connected by residence, source or citizenship.
Tax Residency — Tax residency is a legal status under which a country taxes an individual or company as a resident, based on criteria set by national law.
Tax Sparing — Tax sparing is a double tax treaty mechanism under which a residence country grants foreign tax credit for source-country tax waived under development incentives.
Tax Year — A tax year is the annual accounting period which a tax system uses to assess income and liability, with dates set by national law.
Temporary Non-Resident — A temporary non-resident is a UK tax status under which an individual leaving briefly remains chargeable on certain gains upon return.
Territorial Tax System — A Territorial Tax System is an international tax model under which a jurisdiction taxes only domestic-source income, with national law defining source rules and exceptions.
Thin Capitalisation — Thin Capitalisation refers to a corporate tax situation in which a company is financed mainly by debt, triggering national anti-abuse limits on interest deductions.
Tie-Breaker Rule — A Tie-Breaker Rule is a double tax treaty provision under which an individual resident in both contracting states receives one treaty residence through ordered tests.
Top-Up Tax — Top-Up Tax is a global minimum tax charge under which large multinational groups pay extra tax where a jurisdiction's effective rate falls below the minimum.
Transfer of Residence — Transfer of Residence refers to the cross-border relocation of a person's habitual home, with national tax and customs law deciding when the move takes effect.
Transfer Pricing — Transfer Pricing refers to international tax rules under which prices between associated enterprises must reflect arm's length terms set by national law and treaties.
Treaty Benefit — A Treaty Benefit is a form of double tax treaty relief, such as reduced withholding or exemption, available to qualifying residents of a contracting state.
Treaty Resident — A treaty resident is a person treated by a double tax treaty as resident of one contracting state, based on liability to tax there.
Treaty Shopping — Treaty shopping refers to an international tax arrangement under which a third-state resident routes income through an intermediary to claim treaty benefits.
Treaty Withholding Rate — A treaty withholding rate is the maximum source-country withholding tax percentage, set by a double tax treaty, for payments to partner-state residents.
Trust — A trust is a legal relationship under which a settlor places assets under trustee control for beneficiaries or a purpose, subject to national law.
Ultimate Beneficial Owner (UBO) — An Ultimate Beneficial Owner (UBO) is the natural person who ultimately owns or controls a company, trust or customer under anti-money laundering law.
Undertaxed Payment Rule (UTPR) — The Undertaxed Payment Rule (UTPR) is a Pillar Two global minimum tax mechanism allocating residual top-up tax not collected under the income inclusion rule.
Unilateral Relief — Unilateral relief refers to double taxation relief which a country grants under domestic tax law, independently of any treaty, for foreign tax on foreign income.
United Nations Model Convention — The United Nations Model Convention is a United Nations template for bilateral double tax treaties, which gives greater weight to source-country taxing rights.
US Person — A US Person is a United States tax classification, defined by federal law, covering citizens, residents and certain domestic entities, estates and trusts.
Value Added Tax (VAT) — Value Added Tax (VAT) is an indirect consumption tax charged on supplies of goods and services, with rates, registration and exemptions set by national law.
VAT Identification Number — A VAT Identification Number is a unique reference issued by a tax authority to a business registered for value added tax under national law.
VAT Registration — VAT Registration is the administrative process enrolling a business with a tax authority for value added tax, under thresholds set by national law.
Vienna Convention on the Law of Treaties — The Vienna Convention on the Law of Treaties is a multilateral international law convention codifying rules on concluding, applying and interpreting treaties between states.
Visa — A Visa is an immigration authorisation permitting a foreign national to enter or stay in a state for a stated purpose under national law.
Voluntary Disclosure — Voluntary Disclosure refers to a formal tax compliance procedure through which a taxpayer reports past non-compliance to tax authorities under conditions set by national law.
Withholding Agent — A Withholding Agent is a person or entity required by tax law to deduct tax from payments and remit the amount to authorities.
Withholding Certificate — A Withholding Certificate is a tax form which documents a payee's status and any treaty claim, allowing a payer to apply the correct withholding rate.
Withholding Tax — Withholding Tax is a tax collection method under which the payer deducts tax from a payment at source, with rates set by national law.
Worldwide Taxation — Worldwide Taxation is a tax system principle under which a country taxes residents on income from all sources, with residence criteria set by national law.
Zero Capital Gains Rate — A Zero Capital Gains Rate is a tax rate band of zero applied to qualifying capital gains, with eligibility conditions set by national law.
Zero Rated — Zero Rated refers to a value added tax treatment applying a rate of zero to taxable supplies, with categories defined by national VAT law.
Zero Tax Jurisdiction — A Zero Tax Jurisdiction is a country or territory levying a nil rate of corporate or personal income tax under national law.
Zero Tax Rate — A Zero Tax Rate is a statutory rate of zero applied to a defined tax base or taxpayer, with scope set by national law.

Digital Nomad Tax & Residency Glossary

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