Tax Treaty Case Law around the Globe 2021

S. 36I. Introduction

This is a judgment of the Italian Supreme Court (Corte di Cassazione) that was made public on 8 October 2020. With this decision, the Italian Supreme Court established that Mr. Tiziano Ferro cannot be considered a UK resident for the purposes of the Italy-United Kingdom double taxation convention as he would fall within the exception of Article 4(1), second sentence of the said treaty. According to the court’s interpretation of the Italian authentic version of the treaty, Mr. Ferro is not liable (imponibile) to tax in the United Kingdom due to having failed to provide evidence of having actually paid taxes in the United Kingdom on his non-UK income.

This judgment raises conceptual and linguistic issues concerning the interpretation of the residence clause of tax treaties. After presenting the facts of the case, this short comment will focus in particular on the latter issue.

II. Facts of the Case

Tiziano Ferro is a worldwide famous singer and an Italian citizen. In 2006, he moved his residence to the United Kingdom where he registered as a non-domiciled resident. Accordingly, unlike in the famous precedent of the Pavarotti case, Mr. Ferro did not move to a country with ...