Determining residence for tax treaty benefits

Question

I am trying to determine whether I qualify for tax treaty benefits, specifically in the context of the W8-BEN form. I need to submit this form because I hold US stocks, and therefore am taxed by the US on dividends. I know similar questions have been asked before on here, but they seem to be all concerned with students/research fellows living in the US, which is not my case.

I am a citizen of country A but I currently live, receive income and pay taxes in country B. Country A has a tax treaty with the US, and I would like to know if I qualify as resident of country A solely based on my citizenship.

I guess my question boils down to: is "residence" for eligibility for tax treaty benefits equivalent to "residence for tax purposes"?

Answer 1

No, you do not qualify solely based on your citizenship. Tax treaties are based on tax residency, to avoid issues of double taxation. If you're not a tax resident of country A, and the country has a treaty with the US - that treaty doesn't apply to you. If you were a tax resident of country A, then that treaty would apply, regardless of citizenship.

The only country where citizenship leads to automatic tax residency is the US itself, and its standard tax treaty boilerplates include a clause allowing it to exclude its citizens from almost all of the treaty provisions (the "saving" clause).