Evolution of approaches to determining tax jurisdiction over individuals: historical and theoretical analysis, contemporary issues

Abstract

This article explores the evolution of legal approaches to determining tax jurisdiction over individuals, focusing on the transition from citizenship-based to residence-based taxation frameworks. The relevance of this research stems from the increasing mobility of individuals in the context of globalization, remote work, digital transformation, and displaced persons due to the Russian war in Ukraine, all of which challenge traditional taxation models and create new legal and administrative dilemmas. The study outlines the historical foundations of individual tax jurisdiction, starting with the emergence of territorial- and citizenship-based taxation, and its gradual replacement by residence-based principles in international treaties, particularly under the influence of the OECD Model Tax Convention.

Special attention is given to the criteria used to establish tax residence — such as permanent home, center of vital interests, physical presence, and habitual abode — and the challenges these criteria face in the modern world. The research analyzes specific legal conflicts arising from non-residency, dual residency, wartime displacement (e.g., the case of Ukrainian citizens), and the growing population of digital nomads who are economically active across multiple jurisdictions.

The article highlights the need to adapt existing legal frameworks to contemporary realities, including the development of clearer legal mechanisms to ensure tax certainty and fairness. It also emphasizes the importance of theoretical and doctrinal analysis of tax jurisdiction in supporting future reforms.