Cahiers de Droit Fiscal International (Ifa Cahiers)

One way to approach the topic is to view the provisions from a technical perspective. In the country of emigration, three segments of tax effects can broadly speaking be determined relating to a change of residence. First, recapture of previously permitted deductions or recapture of deferrals on e.g. previously realized capital gains (as in an exchange of shares), triggered by the emigration. Secondly, general or limited exit taxes on unrealized gains or income at the time of the change of residence. And finally, extended unlimited or limited tax liability, where the emigration country domestically retains a right to tax the individual on all or certain items after emigration. In the country of immigration, the main issue is whether a step-up of basis is given. If not, double taxation may occur. Double taxation may also occur even if step-up is permitted, in case the emigration country applies extended tax liability covering also post-emigration appreciation. Double taxation can be avoided by foreign tax credit by either the emigration country or the immigration country, by virtue of either domestic provisions or treaty provisions. A discussion on how to solve double taxation (or double non-taxation) partly based on the OECD model tax treaty, will be provided. Finally, EC law aspects of exit taxes will be discussed. + General Reporter: Professor Luc de Broe (Belgium); + Discussion Leader: Professor Bertil Wiman (Sweden).