2014 Update of OECD Model Tax Convention
Posted by William Byrnes on July 18, 2014
On June 16, 2014 the OECD Council approved the contents of the 2014 Update to the OECD Model Tax Convention. The OECD stated that this update will be incorporated in a revised version of the Model Tax Convention that will be published in the next few months.
The 2014 Update includes the changes to Article 26 and its Commentary that were approved by the OECD Council on July 17, 2012. It also includes the final version of a number of changes that were previously released for comments through the following discussion drafts:
- The application of Article 17 (Artistes and Sportsmen) of the OECD Model Tax Convention (April 23, 2010)
- Revised proposals concerning the meaning of “beneficial owner” (October 19, 2012)
- Revised discussion draft on tax treaty issues related to emissions permits and credits (October 19, 2012)
- Tax treaty treatment of termination payments (June 25, 2013)
- Technical changes to be included in the next Update to the Model Tax Convention (November 15, 2013).
The 2014 Update does not include any results from the ongoing work on the BEPS Action Plan. Moreover, the 2014 Update does not include the changes included in the discussion draft of November 15, 2013 on Proposed changes to the provisions dealing with the operation of ships and aircraft in international traffic (except for a change to the Introduction); as indicated in that discussion draft, further work is needed with respect to these changes before they are included in the OECD Model Tax Convention. The 2014 Update also does not include any of the changes put forward in the discussion draft of October 19, 2012 on Revised proposals concerning the interpretation and application of Article 5 (Permanent Establishment); since it is expected that work on Action 7 (Prevent the Artificial Avoidance of PE Status) of the BEPS Action Plan will result in changes to Article 5, the proposed Commentary changes included in that discussion draft will not be finalised until the work on Action 7 has been completed.