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  • Print publication year: 2020
  • Online publication date: February 2020

6 - Changes of Source and Residence


Focuses on cross-border acquisitions, mergers and reconstructions, particularly those involving permanent establishments and subsidiaries. Previous chapters presume a stable jurisdiction to tax on the basis of source or residence. This chapter considers changes of source and changes of residence. There are limited ways in which a source of income may be changed. It may be created, such as where assets are transferred to a new subsidiary or permanent establishment. Source may be terminated, such as where an existing subsidiary or permanent establishment is liquidated. A source may be transferred, such as on the sale of a subsidiary or permanent establishment. Finally, a source of income may be varied, such as on the conversion of a permanent establishment into a subsidiary, conversion of a subsidiary into a permanent establishment or in cases of mergers and demergers involving corporate groups. Changes of residence are simpler. The tax consequences of commencing residence or terminating residence are considered. In all these matters, the dearth of tax treaty rules is compared with the position under EU Law and particularly the Mergers Directive.