Why is the 183-day rule misunderstood?
The ‘183-day rule’ is not actually a rule, but an exception to the rule that tax is generally paid in the location an individual is working.
The genesis of misconception is found in bilateral income tax treaties designed to eliminate double taxation. Each treaty typically contains an article known as Dependent Personal Services (DPS), which includes a clause that limits the days in country to 183 days. These days may be counted in a calendar year, fiscal year, or rolling 12 months, depending on the treaty. The article also includes restrictions if the remuneration is paid or borne by the host country.
Please sign in or register for FREE
If you are a registered user on The Forum for Expatriate Management, please sign in