UN releases updated model tax treaty adding new technical services fees article–MNE TaxIn the G20 meeting in St. Petersburg 1 x G20 Leaders Declaration meeting in St. Moreover, when taxpayers see multinational corporations legally avoiding income tax, it undermines voluntary compliance by all taxpayers. Therefore, the OECD developed fifteen Actions including among others, actions dealing with hybrid mismatches, limitation of interest deductions, actions recommending the introduction of CFC rules, rules to prevent the artificial avoidance of PE status, eliminating harmful tax regimes, dealing with tax treaty abuse and with transfer pricing, the disclosure of aggressive tax planning arrangements, and improvement of the mutual agreement procedure. This article focuses on the developing countries that are for the purpose of this article defined as non-OECD, non-G20 countries and are therefore not represented in the BEPS 44 group.
[OECD Tax] Model Tax Convention Lecture 4 Jae hyung Jang
UN releases updated model tax treaty adding new technical services fees article
Subscribe To Our Free Newsletter :. The update of the UN Model Convention was launched on The main objective of this revision has been to take account of developments in the area of international tax policies in the last decade. The UN Model Convention has had a profound influence on international tax treaty practice. Together with the OECD Model Convention, it forms the basis for most of the several thousand bilateral tax treaties between countries, which aim at protecting taxpayers against double taxation, with a view to improving the flow of international trade and investment as well as the transfer of technology, while retaining appropriate taxing rights to Governments. The particular aim of the UN Model Convention is to facilitate entering of bilateral tax treaties by developing countries, which would contribute to the furtherance of their development goals. While many provisions of the UN Model Convention and the OECD Model Convention overlap, the Models diverge in many important areas, clearly reflecting the different memberships and priorities of the two organizations.
The UN Model Convention is a non-binding instrument which aims to provide guidance to countries in designing double tax treaties, as well as in applying and interpreting them. It is developed and updated by the UN Committee of Experts on International Cooperation in Tax Matters, a subsidiary body of the Economic and Social Council, composed by 25 members from developed and developing countries acting in their personal capacity. The UN Model Convention is formulated to take into account the specific needs of developing countries in designing double tax treaties in line with their own policy framework. United Nations Model Double Taxation Convention between Developed and Developing Countries 11 Sep The UN Model Convention is a non-binding instrument which aims to provide guidance to countries in designing double tax treaties, as well as in applying and interpreting them. Search for:.
He also holds a B. - MLI aims to modify bilateral double-taxation agreements. It is an international agreement that modifies, in an umbrella manner, the relevant provisions of bilateral double-taxation agreements.
One of the more important aspects of the revised UN model, Towers said, is new Article 12A, which permits countries to impose withholding tax on payments of fees for technical services made to non-residents. Towers noted that the new article provides three exceptions to this definition of technical services fees, including one for payments by individuals for services for personal use. The new model provides guidance defining managerial, technical, and consultancy services, but states also that these terms do not have precise meanings and may overlap, Towers observed. Moreover, domestic law definitions should not be used, he said. Thus, it will be easier to fail the beneficial ownership condition under Articles 10, 11, or 12, than to fail under Article 12A, Towers noted. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.