LONDON, England — A report prepared by multinational accounting firm Ernst and Young (EY) and published on Tuesday, concludes that Dominica’s citizenship by investment (CBI) programme does not facilitate tax avoidance and evasion.
The report notes that the programme, by its very nature, awards citizenship and that citizenship is not the basis on which a person’s obligation to pay taxes rests. Instead, the obligation to pay taxes revolves around ‘tax residency’, – a concept “often built around the degree of personal socio-economic links with a country.”
The OECD Model Convention provides four main tests for determining tax residence: having a physical presence for a minimum amount of time; having a permanent home available; having a close centre of vital interests and having a habitual abode in the sense of being customarily or usually present.
According to EY, it looks to citizenship only if “none of the previous residence tests are enough to determine the country of tax residence.”
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