Where profits include items of income which are dealt with separately in other articles of this convention, then the provisions of those articles shall not be affected by the provisions of this article. Nevertheless, the oecd model is not a universally accepted model tax convention. However, it was fully understood that there was no presumption of correctness to be accorded to the oecd model convention, and that the decisions of the group were in no way required to be. Notes on the relationship between article 32 of the oecd model tax convention and articles 31 and 32.
Convention was being used by oecd member countries in the negotiation of tax treaties not only with each other but also with developing countries. C hapter 2 the history of article 16 of the oecd model. The oecd model convention was first published, in draft form, in 1963. This full version contains the full text of the model tax convention as it read on 21 november 2017, including the articles. Model double tax convention between developed and developing countries. Oecd ilibrary issues related to article 14 of the oecd. Therefore it was felt desirable to clarify its meaning in the 1977 model convention by a change in the wording of the article and its commentary without altering its effects. Model now makes clear it is for the prevention of tax evasion and avoidance. This full version contains the full text of the model tax convention as it read on 21 november 2017, including the articles, commentaries, nonmember economies positions, the recommendation of the oecd council, the historical notes and the background reports. In both the 1963 draft convention and the 1977 model convention, the. Although this may not be an important issue when the flow of services between states is similar, it can have a huge. Oecd releases 2017 update to the model tax convention.
An accord reached between member states of the organization for economic cooperation and development oecd that serves as a guideline for establishing tax agreements. The 50th anniversary of the oecd model tax convention. In 1963, the arms length principle made its way to article 9 of the oecd model tax convention and later in 1980 the united nations also adopted the arms length principle, which is reflected in article 9 of the united nations model double taxation convention between developed and developing countries. As discussed in that report, a main source of difficulties is the fact that some. Oecd ilibrary model tax convention on income and on. Article 17 of the oecd model tax convention the member countries of the oecd have decided in the 1960s to create an exceptional rule for entertainers and sportspersons. Vann brought up the multilateral treaty as an alternative to the bilateral tax treaty network before concluding that as the diversity of tax systems that is the cause of bilateralism has not been directly addressed by the oecd model, it is not possible for the bilateral network simply to evolve. Model tax convention on income and on capital condensed. Model tax convention on income and on capital download. The may 1977 version reflects the revised model double taxation convention on income and capital published by the organization for economic cooperation and development oecd in january 1977 which modified the 1963 oecd. Convention left room for differing interpretations. Oecd draft double taxation convention on income and. This full version contains the full text of the model tax convention on income and on capital as it read on 15 july 2014, including the articles, commentaries, nonmember economies positions, the recommendation of the oecd council, the historical notes now expanded to go back to 1963, the detailed list of conventions between oecd member.
This 1963 report presents the articles on the avoidance of double taxation on income and capital. The focus lies on the scope of the article and the principles of relevance, subsidiarity, sovereignty and reciprocity, and the limitations relating to trade. Convention to clarify the intention of the corresponding provision of the 1963 draft. They are included in the oecd model as an attempt to ensure that,whenart.
Many of those revisions were available at the time this treaty. Article 16 is one of the few provisions of the oecd model that have remained virtually the same since the model was first published in 1963 and consists of only one sentence. In order to fulfil the desire of oecd and g20 leaders to dramatically increase the pace in reforming international tax law, the oecd is. International unless the vienna convention otherwise requires. The oecd model tax convention helps resolve such problems, though it is not binding by law. Application of the oecd model tax convention to partnerships,1 the conclusions of. Experience between 1963 and 1977 had shown that the text of the article in the 1963 draft convention left room for differing interpretations. Oecd releases 2017 update to the model tax convention november 28, 2017 in brief the oecd has released the 2017 update to the model tax convention and the related model commentary, largely incorporating the changes approved as part of the base erosion and profit shifting beps package. The socalled london and mexico models of the league of nations are clearly in the family tree, but the direct parents were those senior tax officials from european countries who, in 1956, began a collective project aimed at the development of uniform tax treaty provisions. This full version contains the full text of the model tax convention on income. Model tax convention on income and on capital 2017 full. This publication is the eighth edition of the full version of the oecd model tax convention on income and on capital. Application of the oecd model tax convention to partnerships, 1 the conclusions of which have been incorporated below and in the commentary on various other provisions of the model tax convention. Rather, the oecd issues a recommendation based on the common position of its members, who in turn commit to follow the model and its commentaries, while taking on board its reservations, when concluding or revising bilateral tax treaties.
Directors fees and other similar payments derived by a resident of a contracting state in his capacity. Double taxation is the taxation of a single taxpayer with respect to the same subject matter over the same period in more than one country. Article 26 of the oecd model tax convention on income and on. Contracting states shall exchange such information as is foreseeably relevant for carrying out the provisions of this convention or to the administration or. American law institute ali, federal income tax project international aspects of united states income taxation iiphiladelphia. Oecd ilibrary draft double taxation convention on income. Show full abstract treaty, with japan, tookeffect barely a quarter of a century ago china has relied heavily onthe oecd model tax convention on income and on capital oecd model, as.
Oecd ilibrary model double taxation convention on income. Article 26 of the oecd model tax convention on income and. The ease with which services are provided crossborder has increased considerably through the years, but this has not been reflected in the model conventions. This publication is the tenth edition of the condensed version of the oecd model tax convention on income and on capital. Double taxation harms trade, migration, and successful economic relations. Taxes on income and on capital are described as all taxes imposed on total income, on. Click download or read online button to get model tax convention on income and on capital book now. Full version model tax convention on income and on capital. Income derived by a resident of a contracting state from immovable property including income from agriculture or forestry situated in the other contracting state may be taxed in that other state. The united nations model convention and the organization for economic cooperation and development oecd model tax convention on income and on capital the oecd model convention. Draft double taxation convention on income and capital 1963 this 1963 report presents the articles on the avoidance of double taxation on income and capital, as agreed upon by the fiscal committee.
This shorter version contains the full text of the model tax convention as it read on 17 july 2008, but without the historical. Article 7 of the oecd model tax convention that seeks to take account of. A handbook for assessors and jurisdictions article 26 of the oecd model tax convention on income and on capital and its commentary. This shorter version contains the articles and commentaries of the model tax convention on income and capital as it read on 21 november 2017, but without the historical notes and the background reports that are included in the full version. United nations model double taxation convention between. A comparative presentation of the texts of the model double taxation conventions on income and capital of the oecd 1963 and 1977, united nations 1980, and united states 1981, nyu law library. Article 8 shipping, inland waterways transport and air transport 1. The latest change is in keeping with the beps conclusion about clarity of a treatys purpose. Oecd model convention compatibility and double taxation issues it has been some time since discussions first began concerning the potential tax treaty override stemming from the imposition of exit or emigration taxes by states that have signed tax treaties following the oecd model convention. By 1963 a full draft was ready though it was not until 1977 that the model double taxation convention was published. Cooperation and developments 2008 model tax convention, 2005 model. It then examines the role of the concepts enshrined in the oecd model convention in eu law and their relevance in the jurisprudence of the court of justice of the european union.
United nations model double taxation convention the united. Ibfd, your portal to crossborder tax expertise why this book. These are the main purposes of the oecd model tax convention on income and on capital, which provides a means of settling on a uniform basis the most common problems that arise in the field of international juridical double taxation. Multilateral instrument to implement beps the oecd g20 base erosion and profit shifting beps project deliverables include, among other recommendations, changes to the oecd model. This publication is the tenth edition of the full version of the oecd model tax convention on income and on capital.
The 1977 version is presented following historical background on double taxation, including the draft 1963 draft convention. Jan 01, 1980 a revised version of that model was published on may 1977. Oecd model tax convention 10 oecd chapter iii taxation of income article 6 income from immovable property 1. The fiscal committee renamed the committee on fiscal affairs in 1971 evolved a model treaty draft based on the 1946 london draft.
It is the basis for negotiation and application of bilateral tax treaties between countries. This model is accompanied by a set of commentaries that reflect oecd level interpretation of the content of the model convention provisions. International jeanbaptiste tristram oecd multilateral. Experience between 1963 and 1977 had shown that the text of the article in the 1963 draft. For the purposes of this convention, the term resident of a contracting state means any person who, under the laws of that state, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, and. For example, what activities and entities fall within article 14 as opposed to the business profits article article 7. An opposing model, designed according to the special interests of developing countries was adopted in 1971 by the member states of the andeangroup.
In this article, the authors examine the requirements contained within article 26 oecd model. Triangular cases global tax treaties commentaries request pdf. The convention consists of articles, commentaries, position statements and special reports on evolving tax issues. Each tax treaty exists to deal with the particular cir cumstances of the signatories, though the interpretation of tax treaties is generally framed by the basic guidance found in the menna convention on the law of treaties. Organisation for economic cooperation and development 1987 ues. This site is like a library, use search box in the widget to get ebook that you want.
Convention on income and capital 1963 hereinafter cited as 1963 oecd draft. Tax policy bulletin 2 pwc in detail terminology, consistency, similarities and differences the models are somewhat descriptive in their overall titles but in different ways. Issues related to article 14 of the oecd model tax convention the taxation of professional services and other activities of an independent character under article 14 of the oecd model tax convention is problematic. This publication is the condensed version of the oecd model tax convention on income and capital this shorter version contains the full text of the model tax convention, but without the historical notes, the detailed list of tax treaties between oecd member countries and the background reports that are included in the fulllength looseleaf and electronic versions. Chapter 2 the history of article 16 of the oecd model convention taxation and tax evasion, consisting of experts from north and south america, europe and asia published a first draft model convention and commentary for the avoidance of double taxation. Oecd, and in 1963 they delivered a final report of their work entitled draft double taxation convention on income and capital oecd, 2012. Oecd model tax convention 8 oecd article 4 resident 1. The oecd model tax convention explaining the oecd s legitimation strategies and why states adhere to the principle of exclusive rights to tax royalties in the state of residence guro klausen master thesis department of political science faculty of social sciences university of oslo may 2014. The 2017 revisions will be incorporated in a revised version of the oecd model and commentaries. The oecd model tax convention universitetet i oslo. Oecd model tax convention and commentary form the basis for hundreds of tax treaties hence somewhat difficult to disregard often the only material available to shed light on meaning can help develop a common body of international tax law can help avoiding double taxation and double nontaxation gives a degree of certainty for taxpayers. In nearly all respects the two versions are substantially the same. It was revised in 1977 and again in 1992, at which time it was converted to a looseleaf format in order. In general, this model allocates the primary right to tax to the country from which capital investment originates i.
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