Model tax convention on income and on capital: (updated 22 July 2010) (ECONOMIE)

Description

Foreword Table of contents Volume I Introduction A. Historical background B. Influence of the OECD Model Convention C. Presentation of the Model Convention Model convention with respect to taxes on income and capital Summary of the convention Title of the convention Preamble to the convention Chapter I. Scope of the convention Article 1. Persons covered Article 2. Taxes covered Chapter II. Definitions Article 3. General definitions Article 4. Resident Article 5. Permanent establishment Chapter III. Taxation of income Article 6. Income from immovable property Article 7. Business profits Article 8. Shipping, inland waterways transport and air transport Article 9. Associated enterprises Article 10. Dividends Article 11. Interest Article 12. Royalties Article 13. Capital gains Article 14. [deleted] Article 15. Income from employment Article 16. Directors' fees Article 17. Artistes and sportsmen Article 18. Pensions Article 19. Government service Article 20. Students Article 21. Other income Chapter IV. Taxation of capital Article 22. Capital Chapter V. Methods for elimination of double taxation Article 23A. Exemption method Article 23B. Credit method Chapter VI. Special provisions Article 24. Non-discrimination Article 25. Mutual agreement procedure Article 26. Exchange of information Article 27. Assistance in the collection of taxes Article 28. Members of diplomatic missions and consular posts Article 29. Territorial extension Chapter VII. Final provisions Article 30. Entry into force Article 31. Termination Commentaries on the articles of the model tax convention Commentary on article 1 Commentary on article 2 Commentary on article 3 Commentary on article 4 Commentary on article 5 Commentary on article 6 Commentary on article 7 Commentary on article 8 Commentary on article 9 Commentary on article 10 Commentary on article 11 Commentary on article 12 Commentary on article 13 Commentary on article 14 Commentary on article 15 Commentary on article 16 Commentary on article 17 Commentary on article 18 Commentary on article 19 Commentary on article 20 Commentary on article 21 Commentary on article 22 Commentary on articles 23 A and 23 B Commentary on article 24 Commentary on article 25 Commentary on article 26 Commentary on article 27 Commentary on article 28 Commentary on article 29 Commentary on articles 30 and 31 Non-OECD economies’ position on the OECD model tax convention Introduction Positions on article 1 Positions on article 2 Positions on article 3 Positions on article 4 Positions on article 5 Positions on article 6 Positions on article 7 Positions on article 8 Positions on article 9 Positions on article 10 Positions on article 11 Positions on article 12 Positions on article 13 Positions on article 14 Positions on article 15 Positions on article 16 Positions on article 17 Positions on article 18 Positions on article 19 Positions on article 20 Positions on article 21 Positions on article 22 Positions on articles 23 A and 23 B Positions on article 24 Positions on article 25 Positions on article 26 Positions on article 28 Positions on article 29 Volume II Table of contents Previous reports related to the model tax convention R(1) – Transfer pricing, corresponding adjustments and the mutual agreement procedure Introduction I. The problem outlined II. Experience with procedures currently available for avoiding or relieving double taxation III. Possibility of mandatory corresponding adjustments subject to arbitration IV. Possible improvements to more satisfactory use of existing arrangements for avoiding double taxation V. Conclusions Annex. Extracts from the 1977 OECD model double taxation convention on income and capital R(2) – The taxation of income derived from the leasing of industrial, commercial or scientific equipment I. Introduction II. General background III. The taxation of income derived from the leasing of ICSE under the oecd model convention and bilateral treaties IV. Suggestions for a revision of the 1977 OECD model V. Conclusions VI. Reservations Annex. Problems arising under Articles 5 and 7 of the OECD model with respect to equipment leasing R(3) – The taxation of income derived from the leasing of containers I. Introduction II. Economic background III. Rules for the taxation of income derived from the leasing of containers under the OECD model convention IV. Application of the OECD model convention V. Problems regarding articles on royalties in bilateral conventions VI. Conclusions VII. Reservations Notes and references R(4) – Thin capitalisation I. The problem stated II. Country practices III. Relevance of tax treaties IV. Practical application of arm’s length principle in relation to thin capitalisation V. Conclusions and suggestions Notes and references R(5) – Double taxation conventions and the use of base companies I. The problem stated II. Analysis of functions and uses of a “base company” III. Counteracting measures in national tax laws IV. Implications of a convention between the state of the taxpayer and the state of the base company V. Implications of conventions with third states VI. Questions of secondary sheltering VII. Combating tax avoidance and taxpayer protection VIII. Final remarks Annex I. International counteracting measures: an overview R(6) – Double taxation conventions and the use of conduit companies I. The problem stated II. The 1977 OECD model convention: general approach and specific provisions III. Bilateral treaties: problems for negotiations IV. Application of existing treaties V. Final remarks Annex I. Description of “conduit” situations Annex II. Examples of bilateral clauses R(7) – The taxation of income derived from entertainment, artistic and sporting activities Introduction I. The problem stated II. The need for information III. Assessment and collection of tax under domestic legislation IV. The interpretation and application of bilateral double taxation conventions V. Conclusions Notes and references Annex. Article 17 R(8) – Tax treaty o verride I. The problem II. The legal analysis of treaty override III. The remedies under international law in case of non-compliance by a party with its treaty obligations IV. Cases of national treaty override V. The position of the committee on fiscal affairs VI. Suggestions for action Notes and references Annex A. Recommendation of the council concerning tax treaty override R(9) – The 183 day rule: some problemsof application and interpretation I. Introduction II. The 183 day rule in the model convention III. Proposed changes to the commentary on article 15 Annex I. Countries using the “day of physical presence” method Annex II. Recommendation of the OECD council R(10) – The tax treatment of software I. Introduction II. Characteristics of software III. Development of software IV. Transfer of software V. Multinational enterprises and software use VI. Practice of member countries VII. The application of the model convention VIII. Problems relating to software payments IX. Conclusions Appendix 1. Questionnaire on tax treatment of software Appendix 2. Replies to questionnaire on tax treatment of software Appendix 3. Proposed amendments to the commentary on the model tax convention R(11) – Triangular cases I. Introduction II. Outline of the problem III. Discussion of possible solutions IV. Conclusion V. Recommendation Notes R(12) – The tax treatment of employees’ contributions to foreign pension schemes I. Introduction II. Background III. Existing treaties IV. Aim of a provision for inclusion in the commentary V. Form of a provision for inclusion in the commentary VI. Conditions of a provision for inclusion in the commentary VII. Other considerations VIII. Suggested provision IX. Conclusion Annex A. Provisions in bilateral tax conventions Annex B. Summary of the six provisions allowing relief for pension Annex C. Suggested additions to the commentary on article 18 concerning the tax treatmentof contributions to foreign pension schemes R(13) – Attribution of income to permanent establishments I. Introduction II. Issues raised by the tax treatment of permanent establishments III. Conclusions and suggestions Annex I. XL IFA congress, New York 1986 Annex II. Questionnaire on the issues raised by the tax treatment of permanent establishments Annex III. Proposed modifications to the commentary on article 7 of the model tax convention R(14) – Tax sparing: a reconsideration Foreword I. Introduction II. The historical development of tax sparing provisions III. Traditional country positions on the issue of tax sparing IV. Tax sparing: an emerging consensus on the need for a re-evaluation V. Recent trends in tax sparing provisions VI. Best practices in designing tax sparing provisions VII. Recommendations Notes Bibliography Annex I. Member country tax sparing provisions referred to in the report Annex II. Tax sparing provisions between oecd member countries Annex III. Tax sparing provisions in treaties between OECD member and certain non-member countries Annex IV. Tax avoidance scheme I Annex V. Tax avoidance scheme II Annex VI. Anti-abuse provisions Annex VII. Article 23 B of the commentary to the OECD model tax convention Annex VIII Recommendation of the council on the granting and design of tax sparing in tax conventions R(15) – The application of the OECD model tax convention to partnerships Foreword I. Introduction II. Application of tax conventions by the state of source III. Application of tax conventions by the state of residence Notes and references Annex I. Proposed changes to the OECD model tax convention Annex II. Reservations by France, Germany, the Netherlands, Portugal and Switzerland Annex III. List of entities in selected countries R(16) – Issues related to Article 14 of the OECD model tax convention Foreword Introduction I. The elimination of Article 14 II. Which activities fall within Article 14? III. Which entities fall within Article 14? IV. What are the practical differences concerning taxation under Articles 7 and 14? V. Does the elimination of Article 14 require changes to Article 7? Notes Annex. Changes to the model tax convention resulting from the decision to eliminate Article 14 R(17) – Restricting the entitlementto treaty Benefits 1. Introduction 2. Nature of the work done by the committee 3. Use of the concepts of place of effective management and permanent establishment 4. New provisions aimed at restricting the benefits of tax conventions 5. Restriction of the benefits of tax conventions after the introduction of a new regime 6. Clarification of the concept of “beneficial ownership” Notes R(18) – Treaty characterisation issues arising from e-commerce 1. Introduction 2. Overview of the report 3. Business profits and royalties 4. Provision of services 5. Technical fees 6. Mixed payments Notes Annex 1. changes to the commentary on Article 12 of the oecd model tax convention Annex 2. Analysis of various categories of typical e-commerce transactions Annex 3. Observations by Greece and Spain R(19) – Issues arising under Article 5 (permanent establishment) of the model tax convention 1. Introduction 2. “Fixed place of business” (paragraphs 1 and 2) 3. Building sites and construction or installation projects (paragraph 3) 4. Preparatory and auxiliary activities (paragraph 4) 5. Agency permanent establishments (paragraphs 5 and 6) Annex 1. Changes to the commentary Annex 2. Observations by the Czech Republic R(20) – Cross-border income tax issues arising from employee stock-option plans Foreword Introduction Background on ESOPS Issues related to the employee Issues related to the employer Notes Annex 1. Graphical illustration Annex 2. Changes to the OECD model tax convention R(21) – Improving the resolution of tax treaty disputes Introduction A. Arbitration of unresolved issues in a mutual agreement case B. Other proposed changes to the commentary on Article 25 of the OECD model tax convention C. Follow-up to other proposals of the 2004 progress report Annex 1. follow-up work on the proposals included in the 2004 progress report Annex 2. Map program statistics for [2006] year R(22) – Application and interpretation of Article 24 (non-discrimination) Introduction A. General issues B. Issues related to paragraph 1 C. Issues related to paragraph 3 D. Issues related to paragraph 4 E. Issues related to paragraph 5 F. Issues related to paragraph 6 Annex. Issues that require a more fundamental analysis of the issue of non-discrimination and taxation R(23) – Tax treaty issues related to REITs Introduction Application of tax treaties to REIT investments Annex. Technical analysis of various approaches put forward for extending domestic reit regimes to foreign REITS Notes R(24) – The granting of treaty benefits with respect to the income of collective investment vehicles Executive summary I. Introduction II. Background III. Application of currenttreaty rules to CIVs IV. Policy issues raised by current treatment of CIVs V. Proposed changes to the commentary to address CIVs Notes Appendices Appendix I. List of tax conventions on income and on capital between oecd member countries (as of 22nd July 2010) Appendix II. Recommendation of the oecd council concerning the model tax convention on income and on capital