The role of corporate residence in tax matters and its relationship with the provision of dividend relief: a comparative analysis between the UK and the US tax systems

The aim of this paper is to illustrate the main features and issues related to the concept of corporate residence, showing to what extent it can have an impact on the provision of dividend relief. To this purpose, I will use the examples of the UK and the US, analysing the concept of residence and explaining why some emerging tax theories are trying to abandon it. Then, I will study the relevant connection between the concept of corporate residence and the provision of dividend relief. Residence is related to the elements of the legal autonomy of corporations. However, this separation of corporations from their shareholders is the main cause for economic double taxation and for other distortions related to corporate income taxes that need to be solved by dividend relief. Abandoning the concept of residence and attributing the corporate profit directly to shareholders would make the use of dividend relief unnecessary. Therefore, the advantage of relating the corporation to the place in which taxes can be enforced is obtained at the cost of the distortions created by corporate taxation and the dividend relief systems.