Broadly, there are four categories of tax systems around the world:
- Residency based – Australia, UK, New Zealand and
most Commonwealth nation
- Citizenship based – USA
- Territory based – Singapore, Hong Kong, Malaysia, etc.
- No income tax – Middle east countries and some tax havens
Where an individual (or accompanying) undertakes activities internationally, under our system, the first question is about the location of the taxpayer’s residency. For an individual, that question revolves around the location of your home, work, family, social arrangements and investments. For a company, it’s all about central management and control or the “effective place of management”. Either way, it’s a critical question.