Being a tax resident in one or the other country can be of significant importance. Your dentist might play an important role in the matter of tax residence.
Tax residence
Tax residence determines in which country your worldwide income and assets are subject to tax. In the tax treaties the Netherlands has with other nations, article 4 is about tax residency. The article 4 is not a clean cut article. It is what we call a soft article. Facts and circumstances determine where a person is a tax resident.
Example
You life and work in the Netherlands. Then you pay tax in the Netherlands. However, your wife and children live abroad. Then you are not a tax resident of the Netherlands. That said, you life in the house in the Netherlands that you own. Now it gets debatable. The house often wins.
Court case
A Vietnamese national registered in Vietnam up to July 2014. Then he changed his registration to the house he owns in the Netherlands till February 2017. Changed his registration back to Vietnam till October 2019, and back to the Netherlands later on.
The Vietnamese national filed a non-resident tax return for the year 2016 in the Netherlands. The Dutch tax office disagreed and demanded he filed a Dutch domestic tax return, in which the world wide income and assets are reported.
It became a court case and in court it was only about article 4 of the Vietnamese Dutch Tax treaty. What are the facts and circumstance that makes this Vietnamese a tax resident in either country?
Tax residence facts
The Vietnamese national has children and grandchildren residing in the Netherlands. A very important fact. When he stays in the Netherlands, he stays in the apartment he owns in the Netherlands. That is an anchor of an argument to be a Dutch tax resident. A winner argument.
Not this time.
The Vietnamese rules make him a Vietnamese tax resident, as he stayed at least 183 days in Vietnam that year. Moreover, he is married and lives with his wife in an apartment in Vietnam. The Vietnamese national was a volunteer, registered a sport clubs in Vietnam and the dentist is in Vietnam.
The court ruled that both countries have even strong arguments, but the more soft facts of the dentist and sport clubs make that this person was a Vietnamese tax resident in 2016.
Tax is exciting
We think tax is exciting. We are excited to learn where your central point of life is. That is the start of the initial contact. Where are you from, where are you living, what are you doing. Are you married? Do you own your own home? Basic questions that need to be addressed to keep it simple and exciting!
