Due to Tax Fraud and other 'events' around the Globe, the old Taxation principle of being 'taxed' in your country of 'residence' is no longer acceptable. Thanks to Ryanair pilots 'declaring their residence in a small village (actually a pub) in western Ireland' pilots are now on 24/7/365 day open season Tax Inspectors Menu!
To close the noose on Global Companies and other 'enterprises' who have been using loopholes, the OECD Article 15 surfaced. The Taxation principle is now on 'who benefits from your services and not where you reside' ie. being TAXED at source and not on the individual to 'self declare'.
http://www.oecd.org/tax/treaties/1914467.pdf
Article 15
INCOME FROM EMPLOYMENT
1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State.
2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any
twelve month period commencing or ending in the fiscal year concerned, and
b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
c) the remuneration is not borne by a permanent establishment which the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic, or aboard a boat engaged in inland waterways transport, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.
NOTE:
- the key is 'effective management'
However, some countries are not happy about pilots working for Ryanair and paying 'token tax' in Ireland but living full time in the country where they are based. These countries have instigated their own legislation to 'ensure tax is paid in the country where the services (children in state schools/medical facilities) are being used'.
How does one become a 'nobody'?