Year of birth: everyone in Europe. Your category is decided by the year printed on the birth certificate, and the whole cohort moves up together — but not everywhere on the same date. Germany changes on 1 January. Portugal changes at the season rollover, when the new season opens on 1 October. Spain, France and Italy fix a swimmer's category for a whole season at a time, so it turns over at the season boundary rather than mid-year. Nowhere in Europe does it turn over on a birthday: a December-born and a January-born child in the same category can be eleven months apart in development and are measured against exactly the same standard.
Age on the day: the United States. A swimmer's age group is their age on the first day of the meet, and it holds for the whole meet even if the birthday falls on day two. Two children born eleven months apart are usually in different brackets — and the same two children swap brackets during the season, on their birthdays, one at a time.
Neither system is fairer than the other; each is unfair in its own way. Knowing which one you're living in explains a lot of otherwise baffling results.