| Summary: | Articulating an optimal global standard for determining corporate residency for tax purposes is notoriously
difficult, especially given the competing theories underpinning corporate taxation. However, exploring this
topic is key when considered against the backdrop of an unprecedented and intensifying examination of the
taxing rights of corporations by the global community. Since 2013, the OECD has endeavoured to codify
international tax rules governing cross‑border transactions under the Base Erosion and Profit Shifting
(BEPS) project and, as part of these efforts, removed the corporate residence tiebreaker rule that hinged
on the place of effective management in its model tax convention, with the United Nations (UN) following
suit. This article considers an optimal basis for attributing residency to corporations. It examines the
background and competing theories in relation to corporate residency in both domestic and international
tax contexts. It argues that the place of effective management remains fit for purpose on a view that strategic
and high‑level managerial activities provide a requisite economic nexus to establish taxing rights. The lack
of a standard tiebreaker rule for corporate residence is expected to exacerbate international tax conflicts
at a conceptual level and thus advocates reviving place of effective management as a tiebreaker rule for
corporate residence. The article notes the inefficiencies in the mutual agreement procedure as a mechanism
for resolving dual‑residency disputes. When dual residency arises, a legislative model based on the place
of effective management should be restored and supplemented by a second‑order hierarchical order of
residency tests to address the totality of the circumstances.
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