3.1.2.1.3 Connection with civil law

As mentioned in section 3.1.1.4, several terms used by the death and gift tax laws are usually determined by civil law (family law, matrimonial property law and the law of succession) whereas other terms are self-defined by the inheritance and gift tax legislation. The different interpretation of those terms, however, can give rise to double or multiple non-taxation in a situation where no personal nexus or objective nexus can be established by the states concerned.

For example, the interpretation of the concept of residence may result in double non-taxation of the cross-border inheritance if the states concerned apply different parameters for evaluating whether a person is a resident of their territory. For example, State A may consider that the deceased A is not a resident of its territory because he does not meet the 180-day test. State B may consider that the deceased A is not a resident of its territory because he does not meet the “animus” part of the civil law concept of residence. State C, the state where the deceased’s property is located, applies its domestic civil law and thus does not consider the property to be a domestic asset. As a result, the cross-border inheritance at hand is not taxed anywhere.