{"id":31357,"date":"2026-03-04T07:41:12","date_gmt":"2026-03-04T07:41:12","guid":{"rendered":"https:\/\/artus.at\/?p=31357"},"modified":"2026-04-14T09:16:35","modified_gmt":"2026-04-14T09:16:35","slug":"taxation-of-expats-part-4-bonus-payments-and-the-causality-principle-in-light-of-double-tax-treaties","status":"publish","type":"post","link":"https:\/\/artus.at\/en\/blog\/taxation-of-expats-part-4-bonus-payments-and-the-causality-principle-in-light-of-double-tax-treaties\/","title":{"rendered":"Taxation of Expats \u2013 Part 4: Bonus Payments and the Causality Principle in Light of Double Tax Treaties"},"content":{"rendered":"

A key aspect\u00a0in\u00a0applying the rules of double taxation agreements (DTAs) is the correct allocation of taxing rights to the respective countries. Article 15 of the OECD Model Tax Convention governs the allocation of taxing rights for income from employment. In this context, the\u00a0<\/span>causality principle<\/span><\/b>\u00a0plays a crucial role, as it focuses on\u00a0allocating\u00a0income based on its underlying cause. This is also referred to as the\u00a0<\/span>principle of economic attribution<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

A decisive point is that taxing rights are allocated\u00a0independently of\u00a0when the income is actually received.<\/span>\u00a0<\/span><\/p>\n

The allocation of taxing rights is carried out in two steps:<\/span><\/b>\u00a0<\/span><\/p>\n

Step 1: Examination of the Causality of the Income\u00a0<\/span><\/h3>\n

First, it must be examined whether the income is connected to work performed abroad. The key question is whether the\u00a0remuneration\u00a0would also have been granted if the foreign activity had not taken place.<\/span>\u00a0<\/span><\/p>\n

For example, a foreign assignment allowance is\u00a0generally not\u00a0paid without a foreign assignment. Consequently, the taxing right for such an allowance lies with the state in which the activity is performed.<\/span>\u00a0<\/span><\/p>\n

Step 2: Allocation Based on a General Allocation Key\u00a0<\/span><\/h3>\n

All other income components that cannot be clearly attributed on a causal basis (such as regular salary, holiday pay, or Christmas bonuses) are\u00a0allocated\u00a0using a general allocation key, for example based on the ratio of working days.<\/span>\u00a0<\/span><\/p>\n

Taxing rights are\u00a0allocated\u00a0according to the following principles:<\/span>\u00a0<\/span><\/p>\n