183-Day Rule

A common standard used by countries to determine tax residency. Generally, if you spend more than 183 days in a country within a tax year, you become a tax resident.

Center of Vital Interests

A test used to determine tax residency based on personal and economic ties (family, home, bank accounts) rather than just days spent.

CFC Rules (Controlled Foreign Corporation)

Anti-avoidance laws that allow a country to tax its residents on the income earned by a foreign company they control, even if that income hasn't been distributed.

CRS (Common Reporting Standard)

A global standard for the automatic exchange of financial account information between tax authorities to fight tax evasion. Banks share your data with your country of residence.

DTA (Double Taxation Agreement)

A treaty between two countries to prevent the same income from being taxed twice. It decides which country has the primary right to tax.

Expat (Expatriate)

A person who lives outside their native country. In tax terms, often used interchangeably with migrant or non-resident.

FATCA (Foreign Account Tax Compliance Act)

A US law requiring foreign financial institutions to report the assets of US citizens to the IRS. It makes it harder for Americans to open bank accounts abroad.

FBAR (Foreign Bank Account Report)

A form (FinCEN Form 114) that US persons must file if the aggregate value of their foreign financial accounts exceeds $10,000 at any time during the year.

FEIE (Foreign Earned Income Exclusion)

A US tax provision allowing qualifying citizens living abroad to exclude a certain amount of foreign earned income (approx. $126k in 2024) from US federal income tax.

FTC (Foreign Tax Credit)

A non-refundable tax credit for income taxes paid to a foreign government. It reduces your home country tax liability dollar-for-dollar.

NHR (Non-Habitual Resident)

A special Portuguese tax regime (now reformed) offering reduced tax rates for new residents for 10 years.

Nomad Visa

A temporary residence permit allowing foreigners to live in a country while working remotely for a foreign employer. It may or may not create tax residency.

Permanent Establishment (PE)

A fixed place of business that triggers corporate tax liability in a country. Working from a home office for a foreign company can sometimes create a PE.

Tax Home

The general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Crucial for US FEIE eligibility.

Territorial Tax System

A tax system where a country only taxes income earned within its borders. Foreign-sourced income is typically tax-free for residents.

Worldwide Tax System

A tax system where residents are taxed on their income from all sources, domestic and foreign.