If there is a tax treaty between the two countries, its tie-breaker tests usually decide where you are resident for the treaty. They are applied in a fixed order, and the first one that gives a clear answer settles it. Without a treaty, both countries can tax you under their own rules.
The tests, in order
- Permanent home. Where you have a permanent home available to you.
- Centre of vital interests. If you have a home in both, where your personal and economic ties are closer.
- Habitual abode. If that can't be decided, where you usually live.
- Nationality. If still undecided, the country of which you are a national.
- Agreement. If none of these settles it, the two tax authorities decide between them.
These follow the OECD model treaty. Many treaties use the same wording, but some differ, so the actual treaty needs reading.
Why it matters
Treaty residence decides which country can tax most kinds of income, and how the other country gives relief, so you are not taxed twice on the same income.
An example
Karim works mainly from Dubai and rents a flat there, but his wife and children live in the family home in Paris. He has a permanent home in both countries, so the first test doesn't decide it. With his family in Paris, the second test may well point to France.
Quick questions
Does nationality decide first?
No. Nationality comes only fourth, after home, ties and where you usually live.
Do companies have tie-breaker tests too?
Yes, but different ones. See where is my company taxed if I run it from another country.
Sources: HMRC International Manual INTM154020: dual residents (explains the OECD model tests).
General information as at October 2026, not advice. The examples are fictional and simplified, and the rules have conditions and exceptions not covered here. Take advice on your own circumstances, in each country involved, before acting.