Tax Treaty Case Law around the Globe 2021

S. 24I. Introduction

The concept of habitual abode is one of the criteria used in tax treaties to solve dual residence situations involving individuals. Although it already appeared in the first version of the OECD Income and Capital Draft Model Convention published in 1963, it was only in 2017 that the OECD Commentary provided a definition of the concept and additional details on how to implement it.

There was no definition of the habitual abode in French tax treaty case law either until a decision given by the Supreme Administrative Court on 16 July 2020. In this decision, the court adopted the very same definition as the one used in the OECD Commentary (2017) even though the latter was published (46 years) after the applicable treaty had been concluded.

II. Facts of the Case

The case at issue involves a French national who moved to Brazil at the end of 2012 and received investment income in 2013. The taxpayer was considered to be resident in France under French domestic law as he had his centre of economic interests in this state in 2013. Nonetheless, he was also considered as resident in Brazil under Brazilian domestic law.

To claim the refund of French taxes on the investment income rec...