Residence plays a key role in the law of tax treaties. Austrian case law often bypasses the OECD Model’s primary tie-breaker of “permanent home" in residence conflicts and focuses instead on the “centre of vital interests". One identified weakness is the inconsistent treatment of certain criteria, in particular regarding whether they relate to the personal or economic sphere, as well as a lack of clear reasoning when it comes to the role of temporal aspects in determining the centre of vital interests. The Supreme Administrative Court tends to place limited weight on international literature and foreign case law, relying instead on its own jurisprudence, originally developed on the basis of Article 16 of the 1954 Austria-Germany tax treaty — predating Article 4(2)(b) of the OECD Model. This may lead to a more isolated approach and an increased risk of treaty interpretation conflicts. Greater consideration of international developments would be beneficial.
