OECD releases draft contents of OECD Model Tax Convention 2017 update

Released 11 July 2017

The Organisation for Economic Co-operation and Development (OECD) Committee on Fiscal Affairs has released the draft contents of the 2017 update to the OECD Model Tax Convention prepared by the Committee's Working Party 1.

The update has not yet been approved by the Committee on Fiscal Affairs or by the OECD Council, although, significant parts of the 2017 update were previously approved as part of the Base Erosion and Profit Shifting (BEPS) package. It will be submitted for the approval of the Committee on Fiscal Affairs and of the OECD Council later in 2017.

Comments are requested on certain parts of the 2017 update that have not previously been released for comments. These changes are as follows:

changes to para. 13 of the commentary on Art. 4 (permanent home tie-breaker clause);

changes to para.17 and 19 of, and the addition of new para. 19.1 to, the commentary on Art. 4 (habitual abode tie-breaker clause);

new para. 1.1 to the commentary on Art. 5 (permanent establishment definition);

deletion of the parenthetical reference “(other than a partnership)” from subpara. 2(a) of Art. 10 and new para. 11 and 11.1 of the commentary on Art. 10 (reduced rate of source taxation on dividends).

Comments should be sent electronically in word format by 10 August 2017 to taxtreaties@oecd.org. Comments should be addressed to the Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA.

View the draft contents of the 2017 update.

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