For instance, if a Chinese entrepreneur holds a second passport but their company operates primarily in China and they, along with their family members, spend most of their time in China, they would still be considered a Chinese tax resident from a tax perspective.
In the case of Canada, in addition to the aforementioned conditions, authorities would also consider where family members live, whether the individual has a local driver's license, and if they own property in the country.
CRS determines tax residency based on the country of current residence. When financial institutions decide which country to exchange information with, the individual's tax residency status is crucial, as it determines to which country's tax authorities the information will be provided.