What is the concept of tax residency?

@sibyl 

Tax residency refers to the determination of an individual's or a company's tax status within a particular jurisdiction. It is based on the connection an individual or a company has with a country that requires them to pay taxes, typically based on their physical presence, economic ties, or legal registration. Tax residency rules vary across countries, but generally, they consider factors such as the duration of stay, the purpose of stay, source of income, and personal or economic ties to determine tax residency status.

Tax residency is crucial because it determines which country has the right to tax a person or a company's worldwide income, assets, and transactions. Different countries have varying tax rates, regulations, and benefits, so tax residency can significantly impact an individual's or a company's tax liabilities and obligations. It is important for individuals and companies to understand and comply with tax residency rules to ensure proper payment of taxes and avoid potential legal issues.