Tax Residence of Individuals in the EU: How Courts Determine the Centre of Vital Interests — An Analysis of Case Law in EU Member States
In my practice, disputes over tax residence are often reduced to two formal considerations: whether the individual spent more or fewer than 183 days in a country and whether another country issued a certificate of tax residence. As a lawyer, I consider this approach overly simplistic. In a cross-border case, the analysis should proceed in stages: first, the individual’s status must be determined under the domestic law of each state; if both states treat the individual as resident, the applicable double taxation treaty must then be applied.
It is at the second stage that I turn to the criterion of the centre of vital interests. Current European practice confirms that this is a comprehensive test. It cannot be replaced by the place of residence of the family, or the source of basic income, or formal registration.
I will begin with the jurisprudence of the Spanish Supreme Court, since it makes the distinction particularly clear between the domestic criterion of economic interests and the conventional centre of vital interests.
In the decision of Tribunal Supremo STS 778/2023 of June 12, 2023, recurso 915/2022, the court considered a situation in which a person could be considered a tax resident of Spain and the United States at the same time.
The court held that the Spanish tax authorities could not resolve the conflict solely by applying the domestic test based on the centre of economic interests. Where both countries treat an individual as resident, Article 4 of the applicable double taxation treaty, including its tie-breaker rules, must be applied.
For me, the following is fundamental here: the internal Spanish criterion of the "basic nucleus or base of economic activity or interests" and the conventional criterion of the center of vital interests are not the same thing.
The center of vital interests in the sense of the convention includes not only economic, but also personal relations of the taxpayer.
Decision:
https://www.poderjudicial.es/search/AN/openDocument/39c1bb58d72217d9a0a8778d75e36f0d/20230623
This position was further developed in STS 1214/2024 of July 8, 2024, recurso 1909/2023.
In this case, the Supreme Court of Spain separately emphasized that in order to determine the center of economic interests, it is not enough to establish from which country most of the income originates.
The court must analyze the totality of circumstances: the location of property, investments, professional activities, business, economic relations and asset management.
If both countries recognize a person as their resident, the convention applies and the analysis becomes even broader, since personal ties are added to economic relations.
The practical conclusion I draw from this decision is that even a significant amount of income from one country does not in itself transfer the center of vital interests there.
Decision:
https://www.poderjudicial.es/search/AN/openDocument/6dc29290fd278522a0a8778d75e36f0d/20240719
In the decision of the Tribunal Supremo of July 22, 2024, recurso 7744/2022, I highlight another important principle: a foreign tax residency certificate cannot simply be ignored. At the same time, its presence does not negate the verification of domestic law and, in the event of dual residency, the application of the convention.
If the other party to the tax treaty recognizes the person as its resident, and the Spanish national law also indicates residency, this creates a situation of dual residency. It should be resolved by means of the tax treaty itself, and not by the unilateral application of domestic law.
Decision:
https://www.poderjudicial.es/search/AN/openDocument/ffad4a901901c839a0a8778d75e36f0d/20240802
In Italian practice, I would especially highlight the decision Corte di Cassazione No 19843 of July 18, 2024.
The case concerned the period before the reform of Italian tax residency legislation, which came into force on January 1, 2024.
The Court of Cassation held that, under the previous version of the legislation, domicilio was defined as the centre of a person’s affairs and vital interests. Particular importance was attached to the place from which those interests were actually and continuously managed in a manner objectively ascertainable by third parties.
The Court also noted that family and emotional ties in themselves do not have automatic priority.
They should be evaluated together with economic, property, professional and other factors.
This is an important conclusion, since in practice the tax authorities often try to reduce the analysis of the center of vital interests to the place of residence of the spouse or children. Cassazione directly shows that this approach is oversimplified.
At the same time, I make sure to separate the conclusions on the old version of the law from the current regulation. From January 1, 2024, Italy has changed the internal definition of domicilio: now the law directly links it primarily to personal and family relationships. But this change refers to the internal residency test and does not cancel the separate application of the treaty tie-breaker for dual residency.
Portuguese case law is particularly important to my analysis because it consistently distinguishes between a taxpayer’s formal tax address and substantive tax residence status.
In CAAD 656/2022-T of 19 June 2023, the arbitral tribunal distinguished between domicílio fiscal and residência fiscal (tax address and tax residence).
A tax address alone does not determine a person's material tax status. Just because a taxpayer has not changed their address with the Autoridade Tributária does not mean that they continue to be a tax resident in Portugal.
The court also pointed out that non-residency does not have to be proven solely by a foreign tax residency certificate. A combination of other evidence confirming actual life and tax ties with another country is admissible.
Decision:
https://caad.org.pt/tributario/decisoes/decisao.php?id=7181
A similar approach was confirmed in CAAD Case 339/2023-T dated December 11, 2023.
The court rejected the position that only a foreign certificate of tax residence can prove non-residency in Portugal.
The court allowed the use of other evidence related to actual residence, work, housing and other circumstances.
Decision:
https://caad.org.pt/tributario/decisoes/decisao.php?id=7556
The same logic can be traced in CAAD 392/2023-T of April 19, 2024.
Portuguese case law nevertheless requires a sufficient and verifiable evidentiary basis. I would not describe this as placing the entire burden of proof unconditionally on the taxpayer: as a general rule, each party must prove the facts on which it relies. However, a taxpayer who claims to have lived abroad and maintained the centre of their life there must provide a persuasive body of objective evidence.
Decision:
https://caad.org.pt/tributario/decisoes/decisao.php?id=7868
Special attention should be paid to the case of CAAD 754/2025-T, decision of January 19, 2026.
In it, the taxpayer simultaneously appeared as a resident of Portugal, Israel and Romania.
From this decision, I do not draw a general conclusion about the weak evidentiary value of the foreign certificate. The court proceeded from a specific conflict: in 2023, the taxpayer was registered as a resident in Portugal, Israel and Romania at the same time. It was this inconsistency that weakened the evidentiary value of the Israeli certificate and required a more in-depth investigation of the facts.
In such a situation, it is necessary to investigate the real circumstances: the duration of stay, the availability of housing, its actual use, the stability of personal and economic ties.
If both countries then continue to treat the person as their resident, the relevant tax treaty applies.
Decision:
https://caad.org.pt/tributario/decisoes/decisao.php?id=10229
Dutch practice provides a particularly clear example of the consistent application of tie-breaker rules.
In the case of Gerechtshof 's-Hertogenbosch, ECLI:NL:GHSHE:2024:2409 of 24 July 2024, the court first determined that a person was a resident of the Netherlands under domestic law.
Since Turkey also considered him as its resident, the court moved to apply the tax treaty.
I draw attention to the strict sequence of the analysis: first, the court determines whether the taxpayer has a permanent home available in either state; if a permanent home is available in both states, it determines the centre of vital interests; if that centre cannot be identified, it proceeds to habitual abode, then to nationality and, if necessary, to the mutual agreement procedure between the competent authorities.
The court eventually concluded that the center of vital interests was in the Netherlands.
Decision:
https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:GHSHE:2024:2409
In another Dutch case, Gerechtshof Arnhem-Leeuwarden, ECLI:NL:GHARL:2025:6249 of 7 October 2025, the court stressed that it is not necessary to prove that a particular country is the sole or main centre of a taxpayer's entire life for domestic residency.
A stable personal connection with the state is enough.
This means that a person may well meet the internal residency criteria of two countries at the same time. It is for such situations that a treaty tie-breaker exists.
Decision:
https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:GHARL:2025:6249
From this practice, I draw five conclusions, which I am guided by when analyzing cross-border tax residency.
First, the 183-day rule is not a one-size-fits-all answer to the question of tax residency.
The number of days may be one of the criteria of domestic legislation, but it does not replace the analysis of other connections and even more so does not cancel the application of the tax treaty in case of dual residence.
Second, the center of vital interests is not equal to the center of economic interests.
Within the framework of the convention, the courts analyze the totality of personal and economic relations.
These may include the family's place of residence, the availability of permanent housing, professional activities, business management, the location of assets, investments, banking activities, children's education, social connections, medical care and actual daily life.
Third, no single factor is usually automatically decisive.
Neither the family, nor the company, nor the real estate, nor the source of the main income, nor the tax address, nor the certificate of residency should be considered in isolation.
Fourth, it is fundamentally important to distinguish between two levels of analysis.
First, residency is determined under the domestic law of each state.
Only after it has been established that both countries consider a person to be their resident does it become necessary to apply the tax treaty and its tie-breaker rules.
Fifth, evidence is no less important than the rules of law themselves.
The courts are guided not only by formal registrations, but also by an objective picture of the taxpayer's life.
Therefore, I recommend that my clients form an evidence base in advance, and not after the start of the check: keep evidence of actual residence and work, use of housing, business management, family and social ties, banking activity and other circumstances of everyday life.
As of October 2026, the case law discussed above remains relevant, and the more recent CAAD decisions issued in 2026 follow the same approach: a tax address and tax residence are not equivalent, different forms of evidence are admissible, and the application of substantive criteria requires a sufficient and verifiable factual basis. I regard this as a consistent European approach: residence is not determined by any single formality, but through a structured analysis of domestic law, the facts and the applicable tax treaty.
Therefore, the statement "I have spent more than 183 days in another country, therefore I am no longer a tax resident of the first country" in complex cross-border situations is legally insufficient.
I therefore do not begin the analysis with a mechanical count of days. I first determine which states are entitled to treat the individual as resident under their domestic laws; I then establish whether dual residence arises; and only then do I apply, in sequence, the criteria set out in the applicable treaty. In my view, this method produces a legally sound conclusion.
Ekaterina Bezhanova
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