OECD model tax convention and its commentary serves as a basis for many Double Taxation Agreements between European countries. How, typically, is a person P taxed according to the tax convention in the following case:

  • P is a resident of country A according to the convention from Jan 1 until Aug 15
  • then, from Aug 15 until Dec 31 they are a resident of country B
  • they derive income from employment which is exercised in the corresponding states (A until mid-August, B afterwards)
  • they receive salary at the end of the month (ie. Aug 31)

Should the August salary be taxed only by the country B (which is the country where P is a resident when he receives the salary) or half-half between A & B, as P already earned half of their August income when they became a resident of B?

  • What are the two countries? I imagine the details will be held in the Double Taxation Agreement (if any) between the two jurisdictions.
    – Matthew
    Aug 19, 2020 at 12:44
  • It's not. See German-UK DTA: "(...) 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 therefrom may be taxed in that other State"
    – sygi
    Aug 19, 2020 at 14:18

1 Answer 1


Individuals generally operate on a cash basis for taxation

When you are paid is when the tax liability occurs.

Larger businesses operate on an accruals basis; when they become entitled to the income is when the tax liability occurs irrespective of when (or if) they get paid.

  • Can you provide a reference?
    – sygi
    Aug 19, 2020 at 14:19

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