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1. Background
1.1. What is a tax convention?
A tax convention, or tax treaty as it is often called, is an official agreement between two countries on the administration of taxation when the domestic tax legislation of the two countries apply simultaneously to a particular issue or taxpayer (e.g., when a taxpayer resident in one country derives income from sources in the other country). Tax conventions provide a means of settling on a uniform basis the most common problems that arise in the field of international double taxation.
Most tax conventions typically include the following broadly defined sections:
The OECD Model Tax Convention is a model tax treaty which has been developed by the OECD. The first version of the OECD Model Tax Convention was published in 1963, and the Model has been frequently updated since then. More than 2000 bilateral tax treaties between countries of the world are based on the OECD Model Tax Convention.
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