Who is covered by the OECD Model Convention?
PERSONS COVERED This Convention shall apply to persons who are residents of one or both of the Contracting States.
What is the OECD tax model?
The OECD Model Tax Convention, a model for countries concluding bilateral tax conventions, plays a crucial role in removing tax related barriers to cross border trade and investment. The OECD Model requires constant review to address the new tax issues that arise in connection with the evolution of the global economy.
What is the purpose of the model tax convention prepared by the OECD and the UN?
This is the main purpose 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.
What is double taxation convention?
Double Taxation Agreements (DTA) are treaties between two or more countries to avoid international double taxation of income and property. On the one hand, there can be an exemption from tax payments or a reduced tax rate on respective payments. On the other hand, there can be a refund of deducted withholding payments.
What is a primary difference between the OECD and UN model tax treaties?
The main difference between the two model Conventions is that the United Nations Model Convention imposes fewer restrictions on the taxing rights of the source country; source countries, therefore, have greater taxing rights under it compared to the OECD Model Convention.
What is a permanent establishment OECD?
1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
What is US model tax convention?
Model tax treaties serve as the starting point for negotiations between two countries. The United States promulgates model treaties on income tax, estate and gift tax, and the exchange of tax information.
What is the difference between United Nations Model Convention and OECD Model Convention?
What is double taxation PDF?
Abstract. International double taxation is subjecting direct to the same tax and taxable materials for the same period of time, by the public authorities from different countries. The advent of double taxation is due to the manner in which criteria are applied to the taxation of income or wealth.
What is an example of double taxation?
Double tax is the taxing of the same income twice. The most common example of this tax policy is with corporate dividends. As the corporation generates a profit, it pays income taxes at the corporate level. Another common example is when the same income is taxed in two different countries during international trade.
Do model treaties such as OECD and UN model treaty allocate taxing rights?
In general, tax treaties do not impose tax. Tax is imposed by domestic law; therefore, tax treaties limit the taxes otherwise imposed by a State. In effect, tax treaties are primarily relieving in nature. Similarly, tax treaties do not allocate taxing rights, although it is often claimed that they do.
Why is the OECD Model Tax Convention important?
The OECD Model Tax Convention on Income and on Capital (the OECD Model) provides a means of settling on a uniform basis the most common problems that arise in the field of international juridical double taxation.
Why is the United Nations Model Double Taxation Convention important?
In addition, the United Nations Model Convention embodies the idea that it would be appropriate for the residence country to extend a measure of relief from double taxation through either a foreign tax credit or an exemption, as is also the case with the OECD Model Convention. 14.
Is there a volume 2 of the Tax Convention?
Volume II includes a section on the positions of non-member countries, reprints of previous reports dealing with tax conventions that the Committee on Fiscal Affairs has adopted since 1977, the list of tax conventions concluded between member countries and the text of the Council Recommendation on the Model Tax Convention.
How does the United Nations Model Convention affect interna-tional treaties?
These Models, particularly the United Nations Model Convention and the OECD Model Tax Convention on Income and on Capital (the OECD Model Convention) have had a profound influence on interna- tional treaty practice, and have significant common provisions.