Qualifying a natural person or a legal person as resident from the point of view of tax law is of great practical importance. A resident of a given country is subject to unlimited tax liability in that country, i.e. his income is taxed there, regardless of where it was obtained. This is a general rule, but in certain situations a natural or legal person may be subject to tax on part of his income in a country where he has no resident status.

 

In order to avoid simultaneous taxation in two countries, appropriate conflict rules are applied, as determined by the internal laws of the states and international conventions.
 

For example, agreements on the avoidance of double taxation between Poland and Belgium and between Poland and France resolve the problem of tax residence of a natural person using the following criteria:

 

• permanent place of residence,
• closer personal and economic ties (the so-called center of life interests),
•  a place where a person usually stays,
• citizenship,
• mutual agreement between the competent authorities of both countries, however, further criteria apply only if the place of tax residence is not established on the basis of the previous one.

 

First of all, the place of permanent residence of a given natural person is taken into account.