Tax Residency in Belize
1. Criteria for Determining Tax Residency in Belize
According to Section 2 of the Income and Business Tax Act, an individual is considered a tax resident in Belize if they meet any of the following criteria:
- Physical presence in Belize for more than 183 days in a calendar year.
- Domicile in Belize, as determined by the common law principles of domicile.
- Ordinary residence in Belize, which implies a more permanent and continuous presence than mere physical presence.
For entities, tax residency is determined based on their place of incorporation or management and control.
2. Impact of International Tax Treaties on Tax Residency Criteria
Belize has entered into several tax treaties with other countries to prevent double taxation and promote cross-border trade and investment. These treaties may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.
For example, the Belize-United Kingdom tax treaty provides that an individual is considered a resident of Belize if they are liable to tax in Belize by reason of their domicile, residence, place of management, or any other criterion of a similar nature. The treaty also includes tie-breaker rules for individuals who are considered residents of both Belize and the United Kingdom under each country's domestic law.
These treaty-specific modifications aim to provide clarity and prevent double taxation by establishing clear rules for determining tax residency in cases involving cross-border activities. They reflect the mutual agreement between Belize and the treaty partner country to facilitate tax compliance and enhance economic cooperation.
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