Glossary of cross-border tax and residence terms

Beneficial owner: A beneficial owner is the person who really owns, controls or benefits from income or an entity, as opposed to someone who holds it in name only, and the exact meaning depends on whether the context is a tax treaty or anti-money-laundering law.
Centre of vital interests: The centre of vital interests is the country with which a person's personal and economic relations are closer, a test used in tax treaty tie-breaker rules.
Certificate of coverage: A certificate of coverage is a document issued under a social security agreement that shows which country's social security system covers a worker.
Citizenship by descent: Citizenship by descent is citizenship that passes from a parent who is a citizen, rather than coming from birth in the country or from naturalization.
Citizenship-based taxation: Citizenship-based taxation is a system in which a country taxes its citizens wherever they live, as the United States does.
Common Reporting Standard: The Common Reporting Standard is an OECD system under which financial institutions collect and report information on accounts held by tax residents of other participating jurisdictions, for automatic exchange between tax authorities.
Controlled foreign company: A controlled foreign company rule lets a country tax its resident companies or shareholders on certain profits of a foreign company they control, usually where those profits bear low tax abroad.
Digital nomad visa: A digital nomad visa is a residence permission some countries grant to foreign nationals who work remotely for employers or businesses based outside that country.
Domicile: Domicile is a legal concept that links a person to the place the law treats as their permanent home, and its meaning depends on the legal system using it.
Dual citizenship: Dual citizenship means being recognized as a citizen by two countries at the same time.
Exit tax: An exit tax is a tax charged when a person or company leaves a country's tax system, often by treating assets as sold at market value at the time of departure.
FATCA (Foreign Account Tax Compliance Act): FATCA is a US law that requires foreign financial institutions to report on accounts held by US account holders and requires some US taxpayers to report specified foreign financial assets.
FBAR (Report of Foreign Bank and Financial Accounts): The FBAR is a US report, filed on FinCEN Form 114, that a US person files when the combined value of their foreign financial accounts exceeds $10,000 at any time in a calendar year.
Foreign earned income exclusion: The foreign earned income exclusion is a US rule that lets a US citizen or resident who meets its tests leave a limited amount of foreign earned income out of US taxable income.
Foreign tax credit: The foreign tax credit is a US rule that lets a taxpayer reduce US tax by qualifying income tax paid to a foreign country or US possession on the same income.
Habitual abode: Habitual abode is the place where a person regularly and normally lives, a test used in tax treaty tie-breaker rules and in some countries' own tax laws.
Naturalization: Naturalization is the process by which a country grants citizenship to a foreign national after they meet conditions set by its law, usually including a period of lawful residence.
Permanent establishment: A permanent establishment is a fixed place of business, or in some cases a dependent agent, through which a business from one country operates in another, and under a tax treaty it lets that other country tax the profits attributable to it.
Permanent home: A permanent home, in tax treaty tie-breaker rules, is a home available to a person on a lasting basis, whether or not they own it.
Place of effective management: The place of effective management is where a company is in fact directed from, a test many tax treaties use to settle the residence of a company that two countries both treat as resident.
Remittance basis: The remittance basis is a way of taxing foreign income and gains only when they are brought into the country, used in the United Kingdom until 5 April 2025.
Saving clause: A saving clause is a provision in most US tax treaties that keeps each country's right to tax its own citizens and residents as if the treaty did not exist, subject to listed exceptions.
Schengen 90/180 rule: The Schengen 90/180 rule limits short stays in the Schengen Area to a maximum of 90 days in any 180-day period.
Split-year treatment: Split-year treatment is a UK rule that divides a tax year into a UK part and an overseas part when a person arrives in or leaves the UK in specified circumstances.
Substantial presence test: The substantial presence test is a US day-count test that can make a person who is not a US citizen a US tax resident for a calendar year.
Tax residence: Tax residence is the status a country gives a person or company that lets it tax them as a resident, often on income from abroad as well as local income.
Tax residency certificate: A tax residency certificate is an official document from a tax authority confirming that a person or entity is resident there for tax purposes for a stated period, usually to claim treaty relief in another country.
Tax treaty: A tax treaty is an agreement between two countries that sets out which country may tax particular kinds of income and how relief from double taxation is given.
Territorial taxation: Territorial taxation is a system in which a country taxes income that arises in or comes from its territory, and generally does not tax income from abroad.
Tie-breaker rule: A tie-breaker rule is a tax treaty rule that decides which of two countries counts as the residence country for that treaty when both countries treat a person or company as resident.
Totalization agreement: A totalization agreement is a social security agreement between two countries that aims to stop people paying social security taxes to both countries on the same earnings.

Countries covered: General
Sources: Each term lists its sources
Tax year: Current rules as checked
Review: Not professionally reviewed
Sources checked November 8, 2026